[Senate Hearing 113-338]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 113-338

 
                S. 2132, INDIAN TRIBAL ENERGY DEVELOPMENT 
                   AND SELF-DETERMINATION ACT AMENDMENTS 
                   OF 2014
=======================================================================


                                HEARING

                               before the

                      COMMITTEE ON INDIAN AFFAIRS

                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 30, 2014

                               __________

         Printed for the use of the Committee on Indian Affairs






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                      COMMITTEE ON INDIAN AFFAIRS

                     JON TESTER, Montana, Chairman
                 JOHN BARRASSO, Wyoming, Vice Chairman
TIM JOHNSON, South Dakota            JOHN McCAIN, Arizona
MARIA CANTWELL, Washington           LISA MURKOWSKI, Alaska
TOM UDALL, New Mexico                JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota                MIKE CRAPO, Idaho
MARK BEGICH, Alaska                  DEB FISCHER, Nebraska
BRIAN SCHATZ, Hawaii
HEIDI HEITKAMP, North Dakota
        Mary J. Pavel, Majority Staff Director and Chief Counsel
              Rhonda Harjo, Minority Deputy Chief Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 30, 2014...................................     1
Statement of Senator Barrasso....................................     2
Statement of Senator Heitkamp....................................    18
Statement of Senator Hoeven......................................    20
Statement of Senator Murkowsi....................................    21
Statement of Senator Tester......................................     1

                               Witnesses

Lankford, Hon. Carole, Vice Chairwoman, Confederated Salish and 
  Kootenai Tribes................................................    25
    Prepared statement...........................................    26
Lebeau, Hon. Tracey A., Director, Office of Indian Energy Policy 
  and Programs, U.S. Department of Energy........................     9
    Prepared statement...........................................    10
Finley, Hon. Michael O., Chairman, Confederated Tribes of the 
  Colville Indian Reservation; First Vice-President, National 
  Congress of American Indians...................................    32
    Prepared statement...........................................    33
Olguin, Hon. James ``Mike'', Acting Chairman, Southern Ute Indian 
  Tribal Council.................................................    39
    Prepared statement...........................................    40
Tom, Hon. Aletha, Chairwoman, Moapa Band of Paiutes Tribe........    36
    Prepared statement...........................................    37
Washburn, Hon. Kevin, Assistant Secretary--Indian Affairs, U.S. 
  Department of the Interior.....................................     4
    Prepared statement...........................................     4

                                Appendix

Hall, Tex ``Red Tipped Arrow'', Chairman, Mandan, Hidatsa and 
  Arikara Nation, prepared statement.............................    51
Howell, Gordon, Chairman, Business Committee for the Ute Indian 
  Tribe of the Uintah and Ouray Reservation, prepared statement..    61


                     S. 2132, INDIAN TRIBAL ENERGY 
       DEVELOPMENT AND SELF-DETERMINATION ACT AMENDMENTS OF 2014

                              ----------                              


                       WEDNESDAY, APRIL 30, 2014


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:30 p.m. in room 
628, Dirksen Senate Office Building, Hon. Jon Tester, 
Chairman of the Committee, presiding.

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

    The Chairman. I will call the hearing on Indian energy 
development to order.
    Today, the Committee will discuss S. 2132, the Indian 
Tribal Energy Development and Self-Determination Act Amendments 
of 2014.
    I am going to start by thanking Vice Chairman Barrasso for 
introducing this bill. I think we both recognize that energy 
development on tribal lands is one of the most promising areas 
of economic development in Indian country.
    The Committee has received testimony numerous times 
regarding development of Indian energy resources. We have held 
oversight hearings and listening sessions. The Committee has 
also taken up similar bills in the last two Congresses. The 
former Chair of this Committee, Senator Byron Dorgan, 
introduced a bill in the 111th Congress. In the last Congress, 
Chairman Akaka and Vice Chair Barrasso co-sponsored the Indian 
Energy bill, S. 2132. This is a culmination of all of those 
discussions.
    The last major congressional amendments regarding tribal 
energy resources were included in the Energy Policy Act of 
2005. In that Act, Congress provided the Secretary of Interior 
the authority to enter into tribal energy resource agreements 
with tribes. These agreements would allow a tribe to manage 
their own energy resources without further Federal approval.
    However, over the past decade no tribe has yet entered into 
a Tribal Energy Resource Agreement (TERA) with the Department. 
Meanwhile, development of tribal energy resources has continued 
to lag behind the development of other Federal or privately 
owned lands.
    You would think the Federal Government's trust 
responsibilities toward tribes and tribal lands would assist 
tribes in developing their resources. Instead, tribes have 
often claimed that development opportunities have been lost, 
specifically because of delays caused by the Federal Government 
to carry out its trust responsibility.
    Legislation such as S. 2132, which we will discuss today, 
HEARTH Act, which was enacted in the last Congress, are 
intended to remove those bureaucratic hurdles by giving tribes 
direct management of their lands and their resources.
    Our tribal witnesses today will provide testimony on all 
types of energy from conventional oil and gas to renewable 
resources such as solar, biomass and hydro. S. 2132 contains 
provisions that would affect all types of energy development as 
well as a section on allowing tribes to administer a federally 
funded weatherization program.
    While I am not yet a co-sponsor of this bill, I am a big 
proponent of improving tribal energy development. I recognize 
that S. 2132 has widespread support from tribes and look 
forward to hearing from the Administration and tribal leaders 
today about this bill. In particular, I hope this hearing 
provides an opportunity to insure that we are not missing any 
other possible fixes that would further improve tribes' ability 
to develop their resources.
    The Chairman. With that, I would ask Vice Chair Barrasso 
for his opening statement.

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

    Senator Barrasso. Thank you, Mr. Chairman. I appreciate 
your kind words.
    You are right, it was Senator Dorgan, when he was Chairman 
of the Committee, who brought this additional concern when he 
brought forth a map of his home State of North Dakota and we 
saw how difficult it was on tribal lands to use the many 
resources that were on those lands. That is why I continue to 
come back time and time again, so I want to thank you for 
holding this hearing today on my bill, S. 2132, the Indian 
Tribal Energy Development and Self-Determination Act Amendments 
of 2014.
    I introduced this bill on March 13 and am joined by 
Senators McCain, Hoeven, Murkowski, Thune, and Enzi as co-
sponsors. The bill is largely similar to S. 1684 which I 
introduced in the last Congress and this Committee favorably 
approved. We continue to advance this measure again because 
energy development on tribal lands is undeniably important. It 
is a significant facilitator for jobs and economic growth in 
Indian country, and for all of America.
    As reported by the National Congress of American Indians, 
tribal lands hold nearly one-quarter of all American onshore 
oil and gas reserves but they produce less than five percent of 
the domestic oil and gas supply. Tribes have called upon 
Congress and the Administration to assist in finding a way to 
tap into that potential.
    The Energy Policy Act of 2005 attempted to do that through 
tribal energy resource agreements, TERAs, you referred to 
those, Mr. Chairman, between tribes and the Secretary of 
Interior. These agreements allow tribes to execute leases, 
business agreements and rights-of-way for energy development 
without further secretarial approval. The agreements were 
intended to reduce bureaucracy and to increase access to energy 
development.
    However, uncertainty in the review process for these 
agreements has prevented tribes from applying for any 
agreement. My bill is intended to address this uncertainty and 
other tribal recommendations in several key respects.
    First, the legislation would streamline the approval 
process for tribal energy resource agreements on Indian lands. 
This bill would provide clear deadlines and requirements for 
approval or disapproval of the tribal application for the 
agreements. In addition, S. 2132 would allow tribes and third 
parties to perform mineral appraisals to expedite secretarial 
approval of tribal energy transactions.
    Moreover, S. 2132 would also encourage the development of 
renewable energy resources by authorizing tribal biomass 
demonstration projects. In harvesting biomass materials, tribes 
could experience multiple benefits. These biomass projects 
would promote tribal forest health and economies, create jobs 
and reduce the risk of destructive wildfires.
    Mr. Chairman, this legislation has been pending for quite 
some time and enjoys wide tribal support and is narrowly 
tailored in a way that provides procedural measures needed to 
kick start energy development.
    Larger, substantive reforms for tribal energy development 
have not been included in this specific bill and certainly 
deserve consideration by Congress. However, that would require 
a more extensive debate and potentially involve multiple 
committees. Mr. Chairman, I want to continue to work with you 
on those initiatives in the future.
    In the interim, I urge my colleagues to advance this 
legislation so it can be signed into law this year and tribes 
can move forward toward energy self-determination.
    I want to welcome the witnesses and look forward to the 
testimony.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Vice Chairman Barrasso. I 
appreciate your testimony. I appreciate your leadership on this 
issue.
    I want to welcome our first panel and would remind all the 
witnesses to limit their testimony to five minutes. This will 
allow Committee members enough time to ask questions. The full 
written statements will be made a part of the record.
    Our first panel includes our Federal officials. From the 
Department of Interior we are going to hear from Kevin 
Washburn, Assistant Secretary, Indian Affairs. Kevin is a 
regular testifier here, almost on a monthly basis if not more. 
Welcome back, Kevin. We look forward to your testimony.
    Then we will hear from Ms. Tracey LeBeau, Director, Office 
of Indian Energy Policy and Programs at the Department of 
Energy. She will talk about how S. 2132 would impact those 
agencies who assist tribes in developing their energy 
resources. Tracey, welcome to the Committee and look forward to 
your testimony as well.
    With that, we will put five minutes on the clock and start 
with the Honorable Kevin Washburn.

          STATEMENT OF HON. KEVIN WASHBURN, ASSISTANT 
       SECRETARY--INDIAN AFFAIRS, U.S. DEPARTMENT OF THE 
                            INTERIOR

    Mr. Washburn. Thank you, Chairman and Vice Chairman for 
holding this hearing.
    Vice Chairman, thank you for your consistent leadership in 
this area. You have been long focused on Indian energy and it 
has needed your focus of attention. We appreciate that.
    S. 2132 has a lot that we really like in it. We are 
grateful you are considering doing something in this area. The 
2005 Act has been relatively unsuccessful. That bill attempted 
to create self-governance and self-determination in this area 
but the tribes have not engaged with it really at all.
    We do not have a single TERA that has been signed. That 
means something has gone wrong because we all know that things 
work better when self-determination and self-governance is the 
order of the day.
    One of the issues about the 2005 Act that was problematic 
is the capacity determination. The bill was really prescriptive 
and really put us in a straightjacket about determining 
capacity of tribes. Frankly, determining the capacity of tribes 
to do something feels very much like a 20th Century concept to 
me.
    We have sort of moved beyond that now with the HEARTH Act. 
In the HEARTH Act, we have to approve a tribe's regulations and 
once we have done so, and we can be confident they have a 
regulatory scheme in place, we can turn the whole program over 
to the tribe. We very much think that is a really good model.
    I think that is the model we like and frankly, it is one 
the House has been comfortable with, the Senate has been 
comfortable with and the President enacted the HEARTH Act.
    One of the big suggestions we have in my testimony is can 
we work with the existing model that we have all sort of agreed 
to in principle. That would largely be our suggestion.
    That said, there is not a whole lot that we disagree with 
in this bill. We have raised a few things about which we have 
some concerns but I think that we have learned we should trust 
tribes. Tribes do better when we trust them to do these things. 
They are most concerned with doing these things right because 
they have to live on the lands about which we are talking.
    We are all in favor of self-governance with regard to 
energy as we are in all things, so why don't I stop right 
there. I think that is sort of the basic bottom line.
    We thank the Committee for giving attention to this 
important issue.
    [The prepared statement of Mr. Washburn follows:]

Prepared Statement of Hon. Kevin Washburn, Assistant Secretary--Indian 
                Affairs, U.S. Department of the Interior
    Good afternoon Chairman Tester, Vice-Chairman Barrasso and Members 
of the Committee. My name is Kevin Washburn and I am the Assistant 
Secretary for Indian Affairs at the Department of the Interior 
(Department). Thank you for the opportunity to present testimony for 
the Department on S. 2132, the ``Indian Tribal Energy Development and 
Self-Determination Act Amendments of 2014.'' S. 2132 is legislation to 
amend the Indian Tribal Energy Development and Self-Determination Act 
of 2005.
    The Department believes that it is appropriate to consider 
amendments to Title V of the Energy Policy Act of 2005, relating to 
tribal energy resource agreements (TERAs). The Energy Policy Act sought 
to increase tribal self-governance over energy development. That Act 
authorized TERA which are designed to shift authority for the review, 
approval, and management of leases, business agreements, and rights-of-
way for energy development on tribal lands from the Federal government 
to participating tribes. Sadly, however, the Energy Policy Act has not 
been successful. Indeed, since promulgation of the Department's TERA 
regulations in 2008, the Department has not received a single TERA 
application.
    The Department supports the goal of increasing tribal self-
governance in the area of energy and mineral development. The 
Department believes that environmentally responsible development of 
tribal energy resources is critical to the economic viability of many 
American Indian Tribes and to the sustainability of many Alaska Native 
villages. Energy and mineral development represents a near-term 
solution for many tribes to promote economic development, small 
business, capital investment, Indian-owned businesses, and job creation 
for tribal members. TERAs are designed to promote tribal sovereignty 
and economic self-sufficiency by establishing a process where tribes 
can assume a greater role in the development of their energy and 
mineral resources.
    Key to a tribe's ultimate success under a TERA is its capacity to 
perform the functions and responsibilities outlined in a TERA--
functions and responsibilities historically performed by the 
Department. Under existing law, the Department plays a critical role in 
determining a tribe's capacity to take on those functions. S. 2132 
seeks among other things to simplify and expedite the TERA process. 
This is a laudable goal. While the Department supports this overall 
goal, the Department would like to work with the Committee to further 
improve S. 2132 as described below.
Implementation of the 2005 Amendments
    As noted, the current TERA regime has not been successful. This is 
not for lack of effort by the Department. Under current regulations, a 
tribe can request a pre-application meeting with the Office of Indian 
Energy and Economic Development (OIEED) to discuss any regulatory or 
administrative activities it might wish to exercise through a TERA. 
These informal pre-application meetings include discussion of the 
required content of a TERA application, such as identifying the energy 
resources the tribe anticipates developing; what capacity, management, 
and regulation will be needed to develop the energy resource; and 
potential mechanisms for building the capacity and pursuing other 
activities related to the energy resource the tribe anticipates 
developing. Since 2008, the Department has met with six tribes who have 
considered entering into a TERA. Of these tribes, one had active oil 
and gas development occurring on its reservation and was considering a 
TERA for further oil and gas development. The other tribes were 
considering renewable energy resource development. We understand that 
several tribes with renewable energy resources have expressed an 
interest in developing a TERA.
    The Department supports several of the provisions in S. 2132:

   Sec. 101(a)(1)(E), requiring consultation with each 
        applicable Indian tribe before adopting or approving a well 
        spacing program or plan applicable to the energy resources of 
        that Indian tribe or the members of that Indian tribe. The 
        Department notes, however, that this consultation requirement 
        could slow the timeframe for adoption or approval of well 
        spacing programs or plans.

   Sec. 101(a)(4)(B), promoting cooperation with the Department 
        of Energy's Office of Indian Energy Policy and Programs in 
        providing assistance to tribes in development of energy plans. 
        (The Department also believes that cooperation with other 
        federal agencies is important and has made efforts to 
        accomplish such cooperation, through the White House Native 
        American Affairs Council.)

   Sec. 102(1) that adds ``tribal energy development 
        organization'' as an eligible entity for grants under this 
        section.

   Sec. 102(2) that adds ``tribal energy development 
        organization'' as an eligible entity for technical assistance 
        from the Department or eligible for financial assistance to 
        procure technical assistance.

   Sec. 103(a)(1) that adds ``production'' to ``facility'' and 
        specifically includes a facility that produces electricity from 
        renewable energy resources. Energy resources developed on lands 
        owned by individual Indians in fee, trust, or restricted status 
        as well as energy resources developed on land owned by any 
        other persons or entities may be included in leases, business 
        agreements, and rights-of-way a tribe or tribal energy 
        development organization may approve as long as a portion of 
        the energy resources have been developed on tribal land. The 
        amendment also expands ``facility to process or refine energy 
        resources'' to specifically include renewable energy resources 
        and to add energy resources that are ``produced from,'' in 
        addition to energy resources ``developed on,'' tribal land. The 
        amendment includes pooling, unitization, or communitization of 
        the energy mineral resource(s) of the tribe with energy mineral 
        resource(s) owned by individual Indians in fee, trust, or 
        restricted status or owned by any other persons or entities.

   Sec. 103, which expands purposes for rights-of-way under a 
        TERA beyond pipelines, electric transmission or distribution 
        lines that serve electric generation, transmission or 
        distribution facilities located on tribal land to include those 
        lines that also serve an electric production facility or a 
        facility located on tribal land that extracts, produces, 
        processes, or refines energy resources (not necessarily 
        produced on tribal land) and lines that serve the purposes of 
        or facilitate the purposes of any lease or business agreement 
        entered into for energy resource production on tribal land.

   Sec. 103, which expands the time period for Secretarial 
        approval of a revised TERA from 60 days to 90 days.

   Sec. 103, which provides that a Tribal Energy Resource 
        Agreement remains in effect until rescinded by the tribe or 
        Secretarial re-assumption.

   Sec. 103, which declines to waive the sovereign immunity of 
        tribes.

   The Department also supports the provision that amends 25 
        U.S.C. 415(e) to allow the Navajo Nation to approve its own 
        leases for business or agricultural purposes for 99 years. The 
        Department is, however, concerned about the extent of the 
        showing needed for the tribe to engage in mineral development 
        (exploration, extraction and development) without Secretarial 
        approval, as discussed further below.

   The Department supports the proposed changes to the existing 
        environmental review process for TERAs, but we suggest that the 
        Committee consider addressing environmental review similar to 
        the approach Congress utilized in the HEARTH Act. Both the 
        Department and the Council on Environmental Quality supported 
        the HEARTH Act approach and the Department generally supports a 
        similar approach here.

    As noted, the Department is concerned with some of the provisions 
of S. 2132. The Department's concerns include the following issues:
A. Allocation of Liability
    We are concerned about a lack of clarity in S. 2132 in allocating 
liability for tribes that choose to utilize a TERA. According to its 
terms, the bill would amend 25 U.S.C.  3504(e)(6) to state that 
nothing in the bill would change the liability of the Department for 
terms of any lease, business agreement, or right-of-way that is not a 
``negotiated term'' or losses that are not the result of a ``negotiated 
term.'' However, the definition of ``negotiated term'' does not clearly 
articulate how liability is allocated and the current language 
regarding the remaining trust responsibility does not provide 
sufficient clarity.
    The Department believes that there is an easy fix to this problem. 
The Department recommends that the Committee replace the current and 
proposed amendment with the recently enacted liability provision in the 
HEARTH Act. This approach will clarify for both the Department and 
tribes the allocation of liability.
B. Determining ``Capacity''
    S. 2132 seeks to amend the statute's capacity requirement by 
providing that a tribe satisfies the capacity requirement if it has 
carried out a self-determination contract or compact ``relating to the 
management of tribal land.'' We recommend that this approach be refined 
to ensure that the function performed pursuant to the self-
determination contract or compact is appropriate given the broad array 
of functions that TERAs may implement.
    The 2005 Act provides a framework under which tribal capacity 
includes not only managerial and technical capacity for developing 
energy resources (which necessarily includes realty, environmental, and 
oversight capabilities), but also managerial and technical capacity to 
account for energy production, experience in managing natural 
resources, and financial and administrative resources available for use 
by the tribe in implementing a TERA. Given the scope of functions that 
could be included in a TERA, successful administration of a self-
governance contract or compact relating to the management of tribal 
lands may or may not be relevant to performing a particular TERA 
function.
    For example, a self-governance contract for realty functions on a 
reservation largely devoted to grazing and residential use may not be 
indicative of regulating the development of oil and gas extraction. We 
recommend an approach that relies on experience with specific duties 
and compliance activities to demonstrate capacity for specific 
functions the tribe wishes to undertake with a TERA. Certainly prior 
participation in 638 contracts/compacts for specific duties and 
compliance activities is an important factor, but depending on the 
specific functions to be undertaken by a tribe in a TERA, it may not be 
the only factor that should be considered.
    Additionally, the Department recommends, as an alternative, the 
Committee consider streamlining or eliminating capacity determinations. 
Under existing law the Secretary is required to determine ``that the 
Indian Tribe has demonstrated that the Indian Tribe has sufficient 
capacity to regulate the development of energy resources of the Indian 
tribe.'' To date, no tribe has applied for a TERA, so we have no data 
on how much effort a tribe must expend for a positive capacity 
determination for the realty, environmental, and oversight activities 
it may assume.
    However, enactment of the HEARTH Act eliminates this determination 
for entire categories of energy production. Because the HEARTH Act 
applies to surface leasing, it is now much simpler for tribes to pursue 
wind, solar and biomass energy projects without Secretarial approval. 
The HEARTH Act's promotion of self-governance for surface leasing 
should be carried forward to mineral development. At a minimum, the 
Indian Energy Development and Self-Determination Act should be modified 
to limit TERAs to oil, gas, coal, geothermal, and other mineral-based 
energy projects, i.e., those that would require a lease under the 
Indian Mineral Leasing Act of 1938, a Minerals Agreement under the 
Indian Mineral Development Act of 1982, or a right-of-way under the 
Indian All Rights-of-Way Act of 1948.
    If Congress maintains the capacity requirement because minerals are 
a limited and valuable resource, a TERA capacity determination could be 
based on whether the tribe contracts BIA realty functions in accordance 
with Pub.L. 93-638. Utilizing this approach would be a well-understood 
procedure for tribes, it would be useful to a tribe regardless of 
whether a TERA were ever obtained, and it is an important component to 
developing energy resources or entering into associated energy leases 
and rights-of-way.
    As currently drafted, S. 2132 uses a similar standard (though not 
necessarily the contracting of BIA realty functions) as a ``safe 
harbor'' standard that would result in an automatic finding of tribal 
capacity. Successfully operating a 638 contract ``relating to the 
management of tribal lands'' for 3 years may not be, in and of itself, 
sufficient to demonstrate that the tribe involved is prepared to 
review, approve and manage leases, business agreements and rights-of-
way for energy development. However, operating BIA's realty functions 
on tribal lands represents a component common to all energy development 
activities a tribe may want to undertake with a TERA. Amending the 
Indian Energy Development and Self-Determination Act to make this an 
explicit component of a favorable capacity determination would be 
clarify the requirement for applicant tribes and streamline the 
Department's review.
    Tribal authority for approving tribal leases for residential and 
business purposes granted under the HEARTH Act may also serve as a 
clear capacity criterion for a Tribal Energy Resource Agreement under 
the Tribal Energy Development and Self-Determination Act of 2005. Such 
tribal authority is based on the tribe's submittal of, and the 
Secretary's approval of, tribal leasing regulations consistent with 
Departmental leasing regulations that also include environmental 
provisions for identification and evaluation of significant effects 
leasing may have on the environment and public notice and comment on 
the effects. While HEARTH Act authority for leasing does not require 
any capacity determination by the Secretary, tribes that have approved 
leasing regulations and have issued leases under that authority may be 
assumed to have both the structure (regulations) and the ability 
(personnel qualified to carry out the leasing functions) for basic 
leasing functions.
    In addition, the tribal environmental regulations required under 
the HEARTH Act may form the basis for the environmental review process 
also required for a TERA under the ITEDSD Act. Other considerations for 
capacity for environmental review and compliance could include 
environmental personnel, experience of the Indian tribe in managing 
natural resources and financial and administrative resources available 
for use by the Indian tribe in implementing the approved tribal energy 
resource agreement of the Indian tribe. An amendment specifying tribal 
adoption of an environmental code that includes requirements under a 
TERA would provide clarity for a capacity determination.
    We also believe that the proposed 120 day limit for the Department 
to determine capacity may not be adequate to comply with the notice 
requirement required by law. Currently, the Secretary must publish in 
the Federal Register a notice that a tribe has applied for a TERA with 
a copy of the TERA and request public comments. The process of seeking 
and considering public comments and to make appropriate changes in the 
TERA based on the public comments likely cannot be accomplished within 
120 days unless the issue of capacity is excluded from the notice and 
comment requirement. As a result, we would request that the 120 period 
run only after the comment period has closed and, if additional changes 
are then necessary, only after a final TERA has been submitted.
C. The Structure of the Petition Process
    The Department suggests that the Committee utilize a review process 
similar to that set forth in the HEARTH Act rather than construct a new 
review process that could lead to confusion and inconsistent 
administration. Aligning the statutory authorization for both processes 
would allow the Department to coordinate the corresponding regulations, 
thereby making the process more transparent and consistent for tribes 
and the public. The Department is comfortable with the different 
standing requirements for third party petitions concerning TERAs versus 
such petitions under the HEARTH Act.
D. Approval Authority for TEDO's and Tribes Without a TERA
    We have strong concerns about the proposed deletion of the TERA 
requirement for a lease, business agreement, or right-of-way entered 
into between a tribe and a tribal energy development organization 
(TEDO). This would be the first time that Congress has allowed for 
leases to be exempt from Secretarial approval based solely on the 
identity of the lessee, and not on any determination, either through a 
capacity determination under a TERA or through approval of regulations, 
that the tribe has a leasing program that can perform this 
responsibility.
E. Other Concerns
    While the Department has other minor concerns which it would be 
willing to discuss with Committee Staff, the concerns discussed above 
are the primary concerns.
Alternative Ideas
    The following represent concepts the Department believes may work 
as alternatives to those in the current bill. We would be happy to help 
develop these concepts in the context of S. 2132 or a new bill, if 
requested.

    1.  Allow the tribes to recover costs from energy developers, e.g., 
environmental review costs, in the same manner that the Bureau of Land 
Management can.

    The nature of this authority, and any limitations on it, would most 
likely require tribal consultation.
    The BLM has the authority to enter into cost recovery agreements so 
that the labor costs of processing energy applications are funded by 
the applicants and not the Department. The BLM's cost recovery 
authority allows funds from developers to supplement existing 
appropriations. The BIA has a form of cost recovery authority in 
theory. However, any funds collected by the BIA must offset 
appropriated funding, so the authority provides no real benefit to 
tribes or the BIA in practice. One immediate concern tribes might have 
could be avoided, however, if this authority specifies that other 
annual funding for participating tribes, such as Tribal Priority 
Allocations, cannot be reduced as a consequence of proceeds from cost 
recovery.
    BLM has used its cost-recovery funds to establish Renewable Energy 
Coordinating Offices (RECOs). The RECO teams include a dedicated 
Project Manager, a Planning and Environmental Coordinator and two 
Realty Specialists who process only renewable energy projects within 
their designated area. The Bureau of Indian Affairs could benefit from 
having its own independent cost recovery authority to gain revenues to 
pursue similar initiatives. Staffing issues continue to be an issue in 
the Department's processing of conventional energy development in 
Indian Country as well.

        2.  Specify that a tribe's initial TERA may be limited in 
        scope, and thus complexity, with subsequent amendments to that 
        TERA focusing only on new and additional responsibilities the 
        tribe wishes to undertake.

    As currently provided by law, TERA authority is defined by the 
resource(s) a tribe wants to develop (e.g., oil and gas, solar) and/or 
the function the tribe wants to undertake (e.g., entering into leases 
and business agreements, granting rights-of-way). We understand that 
the current law does not clearly provide a process for a tribe over 
time to add to its TERA functions without starting over and pursuing an 
entirely new TERA. It therefore would be helpful to clarify that a 
tribe that wants to perform only a limited function initially can phase 
in new, related functions over time as the tribe's capacity increases, 
by amending its initial, approved TERA and not by having to duplicate 
any of the still relevant elements of its initial TERA application. 
Thus, a tribe that wants to develop oil and gas resources will not feel 
obliged to demonstrate it has the capacity to handle all conceivable 
aspects of oil and gas development, from exploration to production to 
refinement, just to issue oil and gas leases. This is consistent with 
the way that the Department and the Navajo Nation have implemented the 
Navajo Nation Trust Land Leasing Act of 2000 [25 U.S.C.  415(e)] and 
the way that the Department currently interprets the HEARTH Act of 
2012.
Conclusion
    Thank you for the opportunity to present the Department's views on 
S. 2132. I will be happy to answer any questions you may have.

    The Chairman. Thank you, Kevin, for that testimony.
    With that, we will go to Ms. Tracey LeBeau.

STATEMENT OF HON. TRACEY A. LEBEAU, DIRECTOR, OFFICE OF INDIAN 
               ENERGY POLICY AND PROGRAMS, U.S. 
                      DEPARTMENT OF ENERGY

    Ms. LeBeau. Chairman Tester, Ranking Member Barrasso, thank 
you for the opportunity to testify on behalf of the Department 
of Energy.
    As Director of DOE's Indian Energy Policy and Programs 
Office, I am responsible for promoting Indian energy self-
determination, and providing, directing, coordinating and 
implementing energy planning, education, financial and 
technical assistance programs to support and facilitate energy 
infrastructure development.
    In doing so, my office has quite a unique perspective on 
energy development challenges and opportunities in Indian 
country which we are prepared to share with you here today.
    While the Department is still reviewing the bill and 
doesn't have an official position to share with you today, I 
came prepared to provide an update to the various energy 
development and management programs under our purview and where 
we believe we are making some inroads.
    I would also like to note that the department is also doing 
what it can to reduce the serious threat of climate change in 
Indian country, particularly with a focus on infrastructure 
resilience and doing what we can to prepare communities for the 
impacts already being felt in tribal communities.
    Since my appointment three years ago, I have fully 
committed to collaborate with Indian country to ensure we 
identify and address tribal priorities. Our office's 
authorities are broad in scope. However, I believe it is 
noteworthy that tribes are showing high motivation to pursue 
clean energy development.
    Responding to that articulated interest, our focus is on 
designing and implementing innovative programs to accelerate 
clean energy and energy infrastructure development. Providing 
Indian country with committed collaborative technical 
assistance is a cornerstone of the programs that we now 
provide. Our guiding star is to work with tribes often in their 
communities as they seek expertise to support their own 
strategic long term solutions.
    Since 2011, we have made an effort to survey, evaluate, 
coordinate and better leverage DOE energy programs across the 
DOE complex. One insight includes that prior to efforts by both 
DOE and Indian country, largely focused on commercial scale 
renewable energy projects which are typically developed to 
export into the broader energy marketplace. This focus is 
understandable given the revenue potential of such large 
projects.
    In our view, however, given the capacity building and 
community energy authorities in the Energy Policy Act of 2005, 
we have identified a considerable opportunity and tribal 
interest to focus efforts on community scale projects to 
address high energy costs and articulated want from tribes to 
own and operate their own facilities.
    Key obstacles we continue to monitor with respect to large 
commercial scale energy development include the cost of 
financing requirements, particularly for renewable projects 
that depend on tax incentives, frequent congestion on the grid 
or difficulty working through interconnections or transmission 
of service with entities who are not jurisdictional or open 
access compliant, and being located in markets that do not 
incentivize renewable energy purchases or markets dominated by 
utilities exempted from renewable incentive programs.
    Another real time observation in working closely with 
tribes has been the level of education and expertise which 
remains a challenge for tribes undertaking often complex energy 
projects but we feel we are making some headway.
    The complexity of the renewable energy tax structure, 
technology risk, and operational issues have made it difficult 
for even the most financially sophisticated tribes given the 
unique nature of these issues. It is particularly the case 
where tribes wish to finance, own and operate their own 
systems.
    Given these observations, the near term goals have been to 
develop programs to respond to these obstacles and 
opportunities so tribes can begin to successfully navigate 
these complexities and begin to get case studies done for 
Indian country on a broader scale.
    Our Strategic Energy Response Team initiative is a 
signature program and unique to our office. The goal of this 
program is to bring our strategic technical assistance to 
tribal communities and Alaska Native communities who have 
already committed resources and efforts to developing clean 
energy.
    Our investments in the START program are already seeing 
some returns. Several of our START projects are resulting in 
tribal investment commitments, construction starts this year 
and deployment of clean energy solutions.
    I am going to leave it at that and look forward to your 
questions about our programs and some of the funding that has 
gone out in the last couple years.
    Thank you once again for the opportunity to share the 
exciting things we are doing in partnership with Indian country 
to promote energy development on Indian lands.
    Thank you.
    [The prepared statement of Ms. LeBeau follows:]

Prepared Statement of Hon. Tracey A. Lebeau, Director, Office of Indian 
         Energy Policy and Programs, U.S. Department of Energy
    Chairman Tester, Ranking Member Barrasso, and Members of the 
Committee, thank you for the opportunity to testify on behalf of the 
U.S. Department of Energy (DOE) on S. 2132, Indian Tribal Energy 
Development and Self-Determination Act Amendments of 2014. As Director 
of the Office of Indian Energy Policy and Programs (Office), I am 
responsible for promoting Indian self-determination and to provide, 
direct, foster, coordinate, and implement energy planning, education 
management, conservation, and delivery programs of the Department that 
promote Indian tribal energy development, efficiency and use and 
enhance energy infrastructure. In doing so, my Office has a unique 
perspective on energy development challenges and opportunities in 
Indian Country.
    While the Department is still reviewing S. 2132 and does not have 
an official position on the bill at this time, I will provide an update 
to the various energy development and management programs under our 
purview where we believe we are making inroads in addition to 
identifying the continuing challenges facing tribal communities in 
energy and energy security.
    The Department of Energy takes seriously its responsibilities and 
commitments to Sovereign Tribal Nations. We are committed to 
strengthening federal-tribal relationships to protect tribal rights and 
interests to promote tribal sovereignty and self-sufficiency. And the 
Department is also focused on doing what we can to reduce the serious 
threat of climate change and, with a heightened focus on resilience, 
doing what we can to prepare American communities, including tribal 
communities, for the impacts of a changing climate that are already 
being felt.
DOE Office of Indian Energy: Background and Executive Summary of 
        Accomplishments
    The U.S. Department of Energy Office of Indian Energy was directed 
by Congress in Title V of the Energy Policy Act of 2005 (``Act''), and 
in previous legislation enacted in 1992, to direct, foster, coordinate, 
and implement energy planning, education, management, conservation, and 
delivery programs that assist Tribes with energy development, capacity 
building, energy infrastructure, energy costs, and electrification of 
Indian lands and homes. This Office has specific statutory goals:

   Promote Indian tribal energy development, efficiency, and 
        use;

   Reduce or stabilize energy costs;

   Enhance and strengthen Indian tribal energy and economic 
        infrastructure relating to natural resource development and 
        electrification; and

   Bring electrical power and service to Indian land and the 
        homes of tribal members.

    To accomplish these goals, the Act conferred on the Office the 
authority to provide grants to assist eligible tribal entities in 
meeting energy education, research and development, planning, and 
management needs, which could include: Energy generation, energy 
efficiency, and energy conservation programs; Studies and other 
activities supporting tribal acquisitions of energy supplies, services, 
and facilities, including the creation of tribal utilities; Planning, 
construction, development, operation, maintenance, and improvement of 
tribal electrical generation, transmission, and distribution 
facilities; Development, construction, and interconnection of electric 
power transmission facilities; Developing a program to support and 
implement research projects that provide opportunities to participate 
in carbon sequestration practices; and Encouraging cooperative 
arrangements between Indian Tribes and utilities that provide service 
to Tribes.
    Since joining DOE three years ago, I have been fully committed to 
implementing the statutory goals for energy development in Indian 
Country which has included a commitment to continually collaborate with 
Indian Country. The results of that collaboration are opportunities to 
identify and address tribal priorities for energy development policies 
and programs and to fill gaps in current Department programs. More 
details about these efforts, as well as future plans, are provided 
below.
Pursuing Sustainable Energy Development in Indian Country
    Our Office facilitates energy development in Indian Country--
including renewable energy sources such as wind and solar, energy 
efficiency improvements, and fossil-fuel electric generation that uses 
carbon sequestration systems, as well as improving the infrastructure 
needed to deliver this energy. Tribes have shown a high motivation to 
pursue expanded clean energy development. It is our experience thus far 
that the DOE Office of Indian Energy Policy and Programs' initiatives 
that are taking root in Indian Country are a direct reflection of the 
innovation and the promise of the next generation of tribal energy 
development. Our priority is focused on providing useful information 
and tools as well as designing and implementing innovative programs to 
accelerate clean energy and energy infrastructure development in Indian 
Country.
    Our office tasked the DOE National Renewable Energy Laboratory 
(NREL) to update all the renewable resource estimates in Indian 
Country. Based on updated data provided by using updated analysis and 
modeling tools, the estimated maximum renewable energy resource 
potential on Indian lands is millions of megawatts (MW) of nameplate 
capacity. These comprehensive updated estimates can be found at http://
www.nrel.gov/docs/fy13osti/57748.pdf. It is clear that further 
development of these energy resources in Indian Country can provide an 
opportunity to not only increase tribal energy reliability and self-
sufficiency but also contribute to the President's energy security 
goals and Climate Action Plan.
    President Obama and SecretaryMoniz have been extremely supportive 
of improving the economy of Tribal communities through enhanced clean 
energy development. At the 2013White House Tribal Nations Conference, 
the President stated:

        `` The health of tribal nations depends on the health of tribal 
        lands. So it falls on all of us to protect the extraordinary 
        beauty of those lands for future generations. And already, many 
        of your lands have felt the impacts of a changing climate, 
        including more extreme flooding and droughts. That's why, as 
        part of the Climate Action Plan I announced this year, my 
        administration is partnering with you to identify where your 
        lands are vulnerable to climate change, how we can make them 
        more resilient.''

    Indian Tribes and Alaskan Native villages have made clear to us 
that resilient energy and energy infrastructure can, as a priority, go 
hand in hand with the vision of a cleaner energy future. Providing 
Indian Country with committed, collaborative technical assistance is a 
keystone of the programs and policies of the Office. Our guiding star 
is to work with Tribes as they implement their own strategic, long-term 
solutions--solutions with the potential to reduce energy costs, enhance 
energy security, promote tribal sovereignty and guide Native 
communities towards a sustainable energy future To support this 
tribally articulated vision, we support a number of programs that 
provide energy policy information as well as practical, market-based 
tools to Tribes that are taking tribal projects past feasibility 
discussions and into investment and deployment decision making.
    The Indian Country Energy and InfrastructureWorking Group was 
established in August 2011 to ensure these and future technical and 
financial assistance programs are responsive to Tribes. The working 
group provides critical advice and recommendations to the Secretary and 
to the Director of the DOE Office of Indian Energy Policy and Programs 
on the strategic planning and implementation of the Department's energy 
resource, energy technology, and energy infrastructure development 
programs.
Promoting Strong Partnerships and Addressing Common Challenges
    We also have taken time to survey, evaluate, coordinate and better 
leverage a variety of DOE energy programs, for example, the Office of 
Electricity Delivery and Energy Reliability, Western Area Power and 
Bonneville Power Administrations, and also including the grants offered 
through the Office of Energy Efficiency and Renewable Energy. Below are 
important lessons learned we would like to highlight:
    Prior to 2011, efforts both by DOE and in Indian Country largely 
focused on commercial-scale projects, which are typically developed to 
export from Tribal areas into the broader energy marketplace. This 
focus is understandable, given the revenue potential of these large 
scale projects. In our view, however, the capacity-building and 
community energy issues highlighted in the Energy Policy Act of 2005 
provisions which guide our Office's mission and goals, there was a 
considerable opportunity and continuing need in community-scale and 
facility-scale energy generation, as well as energy efficiency. 
Community-scale and facility-scale projects are developed to provide 
electricity to the local community (housing) or on-site (government 
buildings, community buildings), usually in order to address fiscal 
challenges of high energy costs in Native communities. These types of 
projects allow tribes to marshal their resources to cleanly generate 
their own energy and electricity; reduce and/or stabilize their energy 
costs; create jobs in the construction, operation, and maintenance of 
these systems; promote energy reliability and self-sufficiency; and 
promote reservation economic development.
    Key obstacles which my Office continues to monitor with respect to 
commercial-scale energy development in Indian Country include:

   Cost to build projects and the financing and funding options 
        available for projects, particularly renewable projects that 
        use financial incentives not well suited to tribal governments 
        or their enterprises;

   Frequent congestion on the transmission grid or difficulty 
        working through interconnection and transmission service 
        agreements with public electric entities whom are not FERC 
        jurisdictional and/or open access compliant;

   Being located in markets that do not support, require or 
        incentivize renewable energy portfolio standards or purchases 
        or markets that are dominated by utilities whom are exempted 
        from any renewable incentive programs; and

   Securing whole buyers who are willing to purchase renewable 
        energy at the cost to produce the energy and whom are 
        unfamiliar with the legalities of financing or contracting with 
        tribal businesses.

    Other recent or real-time observations in working closely with 
Tribes and Alaska Native communities on a variety of projects and 
issues include:
    Much of the high visibility, celebrated commercial-scale energy 
development in Indian Country has been almost exclusively in the 
purview of third-party developers who lease land from Tribes to build 
renewable energy projects in Indian Country. There are three primary 
reasons for this: magnitude of upfront capital cost; tax and other 
financial incentives which promote third party development and 
ownership by taxable entities; and the extensive expertise required to 
build commercial-scale projects.
    Tribes have become more interested in community-scale, facility-
scale development for a number of reasons, including the success of the 
Energy Efficiency Community Block Grant program, state and utility 
companies' incentives that pay for on-site generation, newly emerging 
relative ease of tribal leasing and permitting for renewable projects 
under the HEARTH Act, and reducing or stabilizing costs.
    The level of energy education and expertise remains a challenge for 
Tribes undertaking often complex energy projects, but we are making 
headway. And the lack of energy business acumen is not necessarily 
based on business capacity. The complexity of issues such as renewable 
energy tax structuring and technology risk and operational issues is 
difficult to navigate for even the most business-oriented Tribes, given 
the unique nature of these issues. This is particularly the case where 
Tribes wish to finance, own and operate their own systems without third 
party ownership or participation to address tax and related financial 
incentives.We have provided that training to Tribes which has led to 
affirmative decision making.
    In many respects, there are several issues shared between Alaska 
Native villages and smaller tribes in the contiguous states, including: 
remote locations (cannot access transmission grids), small land bases 
(insufficient for commercial-scale and even sometimes community-scale 
development), small populations (they lack the human resource capacity 
for comprehensive energy development), and scarce financial resources. 
Hence, we have refocused our efforts on the unique energy situation for 
Alaska Native villages.
    Lastly, given this information, our primary short term goal has 
been to develop several programs to respond to the issues, obstacles, 
and opportunities in Indian Country so that we can see more 
implementation of successful, cost-effective projects.
DOE Office of Indian Energy Programs and Priorities
    My Office has recently launched several programs and initiatives to 
promote energy development in Indian Country and address the challenges 
identified above:
DOE Indian Energy START Program
    The Strategic Technical Assistance Response Team (START) initiative 
is a signature and unique DOE Office of Indian Energy program aimed at 
advancing next-generation energy development in Indian Country. The 
START program is focused on the 48 contiguous states and Alaska. http:/
/energy.gov/indianenergy/resources/start-program
    For the 48 contiguous states, early-stage project development 
technical assistance will be provided through the START program to 
selected projects. The goals of the START programs are to bring 
targeted, strategic technical assistance to Tribes and Alaska Native 
governments whom have already committed resources and efforts to 
developing clean energy in their communities. This program is the next 
step in the development process as the Department has invested in 
early-stage feasibility in many Indian communities and this next-level 
development work is providing tribal communities with unbiased, expert 
technical assistance and information which is helping tribal decision 
makers to take the next step towards investments and deployment.
    After being competitively selected, DOE and NREL experts work 
directly with tribal community-based teams as well as tribal legal and 
finance specialists to further develop market feasibility assessments; 
due diligence research, analysis, and documentation; and early pre-
development work to prepare site control, verify resource, pre-qualify 
off-take agreements and strategy, and produce a permitting plan.
    Our investments in the START Program are starting to already see 
returns. Several START projects have resulted in decisionmaking, tribal 
investment commitments, construction starts and deployment of clean 
technology solutions. http://energy.gov/indianenergy/downloads/office-
indian-energy-newsletter-springsummer-2014 In Alaska, we initially 
teamed up with the Denali Commission to specifically assist in the 
development of tribal energy planning for Alaska Native entities. Our 
Alaska START Program continues to actively seek programmatic and 
financial federal and state partners to ensure comprehensive 
collaboration and success for Alaska Native communities in need of 
stabilized energy costs. Alaska START Program Summary at http://
www.nrel.gov/docs/fy13osti/58879.pdf
Energy Capacity Building and Tribal Energy Training
    In three years, we have established a robust tribal technical 
assistance and training program which features in-person, in-depth 
training to tribal leaders and staff as well as web-based, on-demand 
training for those whom prefer to participate at their own pace and in 
their own offices.
    Since launched in October 2012, our renewable energy web-based 
curriculum has had over 1,490 visitors and our resource library which 
hosts dozens of tribally-relevant documents and tools has had over 
1,250 visitors. Since July 2013, we have hosted 49 tribal members for 
in-person renewable product development and finance forums. We have 
held numerous best practice and peer-to-peer forums--ranging from such 
topics as solar energy development to transmission and clean energy 
integration. Since December 2011, approximately 350 tribal leaders and 
staff have attended these in-person best practices forums.
Energy Transmission Training and Technical Assistance
    Understanding the transmission grid, interconnection issues, and 
issues related to distribution of clean energy also are critical for 
successful development of energy projects, whether commercial or 
community scale. We are working with our partners in DOE's Office of 
Electricity Delivery and Energy Reliability, the Western Area Power 
Administration, and the Office of Energy Efficiency and Renewable 
Energy to offer a webinar series to address the range of issues 
associated to developing clean energy and transmission. Since January 
2013, we have had over 2,050 participants in our webinar series.We have 
as a team also provided almost a dozen Tribes with pre-feasibility 
transmission study assistance and a range of other training and 
technical assistance.
Office of Indian Energy's Enhanced Coordination with the Office of 
        Energy Efficiency and Renewable Energy's (EERE) Tribal Energy 
        Program
    EERE's Tribal Energy Program was originally established under the 
Energy Policy Act of 1992 to implement DOE's responsibilities under the 
Act. Since 2005, the program has been implementing the Office of Indian 
Energy's EPAct Title V grant authority and has been providing funding 
related to renewable energy and energy efficiency. Since becoming fully 
operational, the Office of Indian Energy and EERE's tribal program have 
jointly offered coordinated energy programs to ensure against 
duplication, have leveraged grants into START projects to accelerate 
project successes, and have offered free technical assistance to Tribes 
(up to 40 hours) which has focused much of its efforts on energy 
strategic planning and hands-on prioritized technical analysis for 
clean energy projects.
Other DOE Office and Interagency Coordination
    As stated earlier, one of our primary goals is to leverage existing 
DOE resources to promote and implement energy development in Indian 
Country. As one recent example, the Department highlighted tribal 
eligibility and inclusion in our $15 million Solar Market Pathways 
funding opportunity announcement. This funding opportunity seeks to 
help state, tribal and local communities develop replicable multi-year 
strategies that spur significant solar deployment, drive down solar 
soft costs, and support local economic development efforts. Our 
experience is the Office's vantage point enhances DOE-wide coordination 
which facilitates more opportunities to leverage the considerable 
technical assistance mechanisms developed by our programs for 
government and community leaders. These programs also have created 
educational materials byworking with and learning from government 
leaders on implementing renewable energy policies and programs at the 
community level. It is our goal to leverage those lessons and best 
practices in Indian Country, so that we do not have to recreate the 
wheel and can apply proven techniques and technical assistance.
    We also intend to build on the many relationships and coordination 
efforts we have initiated with other federal agencies that provide 
support for energy development. Those agencies include the Department 
of the Interior (DOI), Department of Agriculture, Denali Commission in 
Alaska, Environmental Protection Agency, and the Department of 
Commerce. For example, in Alaska, we have been actively engaged in 
energy development and management activities over the last two years 
and as part of the National Strategy for the Arctic Region, and will 
take the lead on the implementation plan for promoting more renewable 
energy development in the Alaska Native villages in the Arctic Region. 
This plan includes continuing the Office of Indian Energy's Alaska 
START program, comprehensive strategic technical assistance to assist 
Alaska Native villages with community-wide energy issues and project 
opportunities. The Office of Indian Energy will also convene a 
renewable energy development forum in the summer of 2014 to bring 
together key stakeholders in renewable energy development and focused 
on building public-private partnerships as the means for structuring 
and financing renewable energy projects remote Alaska Native villages. 
Also, in support of its Alaska efforts, the Office of Indian Energy has 
stationed a full-time program manager in Anchorage.
Setting Priorities in Fiscal Year 2015 Budget and Future Efforts
    The President's FY 2015 budget request, which includes $16 million 
for Indian Energy Policy and Programs as a separate appropriation, 
reflects the consolidation of our tribal energy programs and Office of 
Indian Energy into a single office. This increased and consolidated 
budget request will enable DOE to maintain key initiatives while 
leveraging authorized tools and build on initiatives developed and 
executed since 2011. For example, we will continue: to support the 
Indian Country Energy and InfrastructureWorking Group; the START 
Program; to expand our energy capacity building efforts; and to provide 
additional technical assistance to Tribes in support of tribal energy 
development projects.
Conclusion
    Thank you for the opportunity to share the exciting things we are 
doing in collaboration and in partnership with Indian Country to 
promote energy development on Indian lands.

    The Chairman. Thank you, Tracey, for your testimony.
    I am going to start with questions for Kevin Washburn.
    Your testimony references the provisions of the HEARTH Act 
several times as alternative to some of the TERA language in S. 
2132. With the relative success of the HEARTH Act provisions, 
what are your thoughts on simply expanding authority to include 
tribal subsurface development for all tribes that choose to 
adopt their own regulations?
    Mr. Washburn. I think that is probably the right approach.
    We reinvent the wheel a lot in Indian country so we have 
five volumes of the United States Code with statutes dealing 
with Indian country. We often do similar things in different 
ways in different statutes.
    I think the HEARTH Act looks like it is being very 
successful. Since it is something we all agree on, we think 
that model is a good one to follow. We actually deal with some 
of the same issues we are trying to deal with in this energy 
Act.
    The Chairman. Currently, S. 2132 would expand the HEARTH 
Act provisions to include subsurface development but only for 
the Navajo Nation. You mentioned the department has some 
concerns about that provision. Could you talk a little more in-
depth about what those concerns are?
    Mr. Washburn. The Navajo Nation thankfully has gone forward 
quite a bit on some of these things. We have tested out some of 
these things with the Navajo Nation and that has worked well.
    The HEARTH Act is a good model. However, mineral 
development is more complicated than business site leases or 
something like that or surface leases. I think that basically 
is the issue. That is where the Navajo model is important.
    We need to recognize there are some slight differences in 
the way the HEARTH Act works and the way energy leasing needs 
to work. Those are sort of the bases for our concerns around 
the Navajo version.
    The Chairman. We have heard a lot in the last couple of 
years about a one stop shop. I believe the department is using 
a virtual one stop shop for Ft. Berthold for oil and gas 
permitting. The BLM currently has one stop shops in seven 
locations created by the Energy Policy Act of 2005.
    Should Congress consider similar statutory language for the 
BIA or modify the existing one stop shops to strengthen the 
BIA's involvement?
    Mr. Washburn. Let me say this. I think the one stop shop 
model in some cases has been successful. Everybody has sort of 
a different idea of what they mean by one stop shop. A lot of 
tribes mean they want a shop on their reservation that has 
every Federal agency. That is hard. It is hard to produce this 
everywhere and get all the Federal agencies lined up that we 
need to do that. We just don't have the fiscal resources to 
open all those offices.
    We have tried to do it. We have experimented with it. It is 
not a bad idea. It is just that we don't have all the fiscal 
resources we need necessarily to accomplish one everywhere that 
a tribe wants one.
    Another approach is to try to locate those in one stop in 
the United States. It may not be on every single reservation. 
We have toyed with both those models in different ways. That is 
an improvement.
    The Chairman. If there was a one stop shop in the United 
States, I'm assuming that could all be accessed through the 
Internet?
    Mr. Washburn. That's right.
    The Chairman. Tracey LeBeau, your testimony discussed the 
progress your office has made in providing technical assistance 
to tribes through the START Initiative. Can you describe what 
has been successful?
    Ms. LeBeau. We have had a few projects, namely the San 
Carlos Apache is one notable one where we have been able to 
work very closely on the ground with tribal staff and decision-
makers to help them sort through technology issues and also the 
very complex financial structuring issues inherent in a lot of 
these renewable energy projects.
    I believe they are set to start construction in the next 60 
days on a solar project to serve their community needs.
    In Alaska, we have had a number of areas where we have made 
progress to help tribes get technically ready and further down 
the road to access and better leverage State funding which is a 
very significant area of funding for Alaskan Native 
communities.
    I am looking forward to other near term announcements on 
new construction starts this year and next for some of the 
projects we have been working on.
    The Chairman. You talked about State funds. Is it allowed 
to bring in the outside capital, private capital?
    Ms. LeBeau. Definitely. As an example, San Carlos leveraged 
a State renewable energy incentive, and put in their own debt 
financing to make that project a reality. In Alaska, that has 
definitely also been the case.
    The Chairman. Vice Chairman Barrasso?
    Senator Barrasso. Thank you very much, Mr. Chairman.
    Mr. Washburn, your written testimony stated the Department 
has strong concerns regarding the tribal energy development 
organizations. These are organizations that must be majority 
owned and controlled by the tribe. The bill would treat certain 
transactions between the tribe and the organization as an 
agreement with the tribe itself or its agency.
    I appreciate the Department staff working with my staff on 
this provision. Why do you believe the Secretary should review 
intratribal transactions. I think you said in your statement 
always trust the tribes.
    Mr. Washburn. I think our written testimony is probably a 
bit too strong on that by saying strong concerns. I think we, 
in general, should trust the tribes.
    The key to tribal economic development or energy 
development organization is slightly removed from the tribes. 
It is not exactly the tribe, but is an organization the tribe 
has a strong interest in. I think we should be able to work 
closely in that context. That is pretty close to the tribe 
doing the development itself. I see that.
    We will work with you on that and see if we can get to 
comfort on that.
    Senator Barrasso. I want to talk a bit about Federal 
liability. You written testimony talks about Federal liability 
provisions for the TERA and the agreements which you say are 
unclear in my bill but you also say in the Energy Policy Act of 
2005 they are unclear.
    You recommend replacing the Federal liability provisions 
with those contained in the HEARTH Act of 2012, which is a 
broader waiver of liability. Can you explain why you think that 
a broader waiver of Federal liability is appropriate for 
subsurface mineral resource development?
    Mr. Washburn. I guess this goes to the point I made 
earlier. I am an Indian law scholar in my day job when I am not 
in the government. We often use slightly different language to 
reach the same basic meaning in Federal law. We make lawyers 
wealthy by doing that but we are largely trying to achieve the 
same outcome.
    Again, this is an area where we all agreed on the language 
in the HEARTH Act and everyone celebrated that language. This 
language is pretty similar but is slightly different. It feels 
like it is a full employment act for lawyers and doesn't 
accomplish much difference. I would suggest that we use the 
same language we all agreed on in the HEARTH Act.
    Senator Barrasso. For tribal energy resource agreements, a 
tribe needs to demonstrate sufficient capacity to regulate 
energy resource development. Your written testimony suggests 
eliminating from my bill and from current law the provision 
that requires tribes to demonstrate sufficient capacity.
    Can you spend a little time explaining why the capacity 
determination should be eliminated?
    Mr. Washburn. It feels kind of old school to me, frankly. 
We have started trusting tribes a lot more and it has taken 
time. The Federal Government comes slowly along but has learned 
to trust tribes more. Again, it is the tribe that lives on this 
land and is most affected by the outcomes of development.
    I think we have learned that when we trust tribes to do the 
right thing, they are basically doing it for themselves and can 
be trusted as well as Federal officials can or Federal 
bureaucrats can to make decisions about these actions.
    Senator Barrasso. Ms. LeBeau, following up on what we just 
heard from Mr. Washburn, entering tribal energy resource 
agreement, a tribe must have sufficient capacity to regulate 
the development of energy resources. Part of your Office's 
specific responsibility is to assist tribes in capacity 
building for energy development.
    Can you tell us a bit about how you collaborate with the 
Department of the Interior to ensure that tribes have that 
capacity to regulate energy resource developments?
    Ms. LeBeau. Most of our capacity building and training 
programs really revolve around helping support technical 
capacity, getting them more acquainted with technology, better 
acquainted with technology risks, energy facility operations 
and how these projects typically get developed and financed and 
what the energy marketplace looks like.
    We work very closely with the Department of the Interior as 
their focus has been more on energy capacity building in terms 
of governance matters related to energy development. I think 
there is a nice complementary role we play and we collaborate.
    Senator Barrasso. Thank you, Mr. Chair.
    The Chairman. Senator Heitkamp?

               STATEMENT OF HON. HEIDI HEITKAMP, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Heitkamp. Thank you, Mr. Chairman.
    First, I want to say, Kevin, in this room are probably 
about 15-20 students from the Mandan, Hidatsa, and Arikara 
Nation. What we talk about is their future when we talk about 
the development of this resource, doing it the right way but 
also not discouraging folks from actually making that 
investment.
    For many of our treaty tribes, whatever land was negotiated 
in those treaties is the land they have to develop and use. I 
think one of the biggest complaints that I hear repeatedly in 
Indian country is that the system of Federal regulation treats 
these as if they were public lands and not tribal lands.
    I think both of you acknowledge that this is land that 
first and foremost the tribes have primacy over. The Federal 
Government would not play the same role if these were private 
leases that did not have any kind of tribal or Federal land 
involvement. This creates a real system of problems for 
developing these resources on the reservation. I don't think it 
can be understated.
    I met yesterday with a major company that does business on 
the Mandan, Hidatsa, and Arikara Nation who told us that they 
are this close to pulling out and this close to moving those 
rigs someplace else because of the morass of Federal 
permitting.
    Senator Dorgan once said it takes four agencies and 49 
steps. I think with the Mandan, Hidatsa and Arikara Nation, we 
say it is seven agencies and 100 steps.
    The reason we are pushing in a very aggressive way this 
notion of one stop shop is all too often what happens is you 
say, it's BIA's fault, then BIA says it's BLM's fault and BLM 
says, oh, no, the slow up is with Fish and Wildlife, so around 
and around and around the circle they go. In the meantime you 
have now frustrated everyone.
    I want to go back to Senator Tester's discussion about one 
stop shop and accommodating those concerns not from the 
standpoint of just ease of discussion but accountability of all 
those agencies to work together. I know there has been some 
discussion about doing this in one central location, say 
Denver, where we can actually get an answer.
    I think in order to reestablish faith with the tribes and 
the mineral rich tribes, we need to have timelines that people 
actually consider valid and essential. We have the 
predictability.
    I would like you to comment about building a one stop shop 
in Denver and also talk about what would be your reaction if we 
set a timeline and said all you Federal agencies who want to 
participate, instead of saying no longer is this your job, we 
are going to say you have two months from the time of 
application to actually get it done, a completed application. 
What would be your reaction?
    Mr. Washburn. That would motivate us.
    Senator Heitkamp. I hope so.
    Mr. Washburn. These are difficult issues and the first one 
you raised, the fact that on non-Indian lands nearby, private 
lands, people have to go to one government to get everything 
worked out, usually the State government. On Indian land, they 
have to work with both the Federal Government and the tribal 
government.
    You already have double the number of governments people 
have to work with. There is always sort of a clash of multiple 
interests whenever we do any kind of energy development. There 
are sacred sites, endangered species, interest in getting 
minerals out of the ground, economic development and all that. 
These are difficult issues. We put different Federal agencies 
in charge of each of those interests.
    Senator Heitkamp. You do understand their problem with this 
distinction of public land versus tribal land?
    Mr. Washburn. I do understand that distinction. The fact is 
Federal land is what keeps the States from being able to swarm 
on to it and start regulating. If it is not Federal land, then 
it is State land. In the grand scheme of things, that is what 
we recognize. We recognize there is Federal land and there is 
non-Federal land. Non-Federal land is subject to State taxation 
and State regulation.
    Senator Heitkamp. Tribal land isn't. You and I can have 
that discussion another time.
    Mr. Washburn. Fair enough.
    Senator Heitkamp. I did a little work on State taxation in 
Indian country. I would dispute some of your statements. Kevin, 
you and I can debate this back and forth. We have spent a lot 
of quality time together but just a quick answer to 
establishing a time certain whether you are willing to do that 
with all the agencies to facilitate development of tribal 
resources?
    Mr. Washburn. They will throw me out on my ear if I go back 
and say I just got us 60 days to dramatically transform oil and 
gas development in Indian country.
    Let me say this, we are definitely interested in working on 
something like that. The White House Native American Affairs 
Council, which Sally Jewel chairs, is meeting tomorrow at the 
White House with several Cabinet Secretaries. These are the 
kinds of issues we are trying to deal with, breaking down silos 
between Federal agencies. We will work on progress in breaking 
down those silos.
    Senator Heitkamp. Kevin, I look forward to a response.
    The Chairman. Senator Hoeven.

                STATEMENT OF HON. JOHN HOEVEN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Hoeven. Thank you, Mr. Chairman.
    Secretary Washburn, thanks for joining us today.
    I found out recently, and it has been in the media, that 
two infants have died on the Spirit Lake Reservation. We don't 
have any information yet on what happened. I believe the FBI is 
investigating.
    I am wondering if you have any information you can provide 
to us or if you have any information, even if you can't provide 
it to us, and what steps you are taking to ensure that you are 
doing everything you can and that BIA is doing everything it 
can to protect families and particularly children on the Spirit 
Lake Nation Reservation.
    Mr. Washburn. Thank you for your longstanding concern and 
interest in this issue. We have worked together quite a bit to 
try to address these issues. I know you know a lot of the 
things we have been doing.
    I won't speak about the infant investigation because I 
don't want to jeopardize it. I know you understand that. The 
public has a right to know these things but we often can't talk 
about those things until the time is appropriate. I appreciate 
your understanding about that.
    We have made great efforts over the past year or so to 
ensure that we do better by the children in Indian country. We 
have been working on several different fronts, we have been 
working on updating our BIA protection handbook, working on 
improving our BIA Indian child welfare guidelines for State 
courts and working specifically at Spirit Lake to try to get 
Spirit Lake staffed.
    We have retroceded the authority from the tribe back to the 
Federal Government for some of the protection issues out there. 
Again, I can't talk about the specific facts of the case but we 
are painfully aware of these issues and are following up.
    Senator Hoeven. Can you assure me you are doing everything 
you can with BIA to make sure this situation addressed fully 
and you are doing everything you can for child safety on the 
reservation?
    Mr. Washburn. Senator, yes, I can make that statement to 
you with confidence. We are also working with the Department of 
Justice rather closely as well.
    Senator Hoeven. As you know, I put forward the Native 
American Children's Safety Act which would provide additional 
protection for Native American children in foster homes. Are 
you willing to work with me to see we get that passed to 
provide additional protection for children on the reservation?
    Mr. Washburn. We would be happy to work with you more on 
that bill. We testified on that bill before and have some 
concerns about the bill but we understand what you are trying 
to do and agree with your overall goals. We will work with you.
    Senator Hoeven. I would encourage you to contact me and if 
you have concerns, let's work on those. I am willing to do that 
with you.
    Speaking about legislation, the Ranking Member on this 
Committee introduced a bill, the Indian Tribal Energy 
Development and Self Determination Act and was kind enough to 
allow me to co-sponsor that with him. That would address some 
of the concerns that Senator Heitkamp and Senator Tester have 
raised in terms of energy development on the reservation across 
the country.
    I would really encourage your help and support on that 
legislation in terms of getting at some of the red tape and 
some of the challenges that were faced on the reservation. Have 
you had a chance to look at the bill and I would like your 
thoughts on it.
    Mr. Washburn. We testified extensively on it before you got 
here. I submitted written testimony on the bill.
    I will say that it would be a feather in the cap of this 
Committee to get something passed on Indian energy this year. 
We will work with you to get something we can agree on because 
it is time. The Vice Chairman has been working on this for a 
very long time and thank you for your support of that work. I'd 
like to see something happen here.
    Senator Hoeven. Ms. LeBeau, I think you could be very 
helpful with that legislation as well. Right now, in North 
Dakota, the Three Affiliated Tribes are producing an amazing 
amount of oil and gas but they are flaring off 40 percent of 
the natural gas that is being captured.
    We need markets for that gas. That is part of the equation 
and we have legislation on that part but we have to be able to 
develop the infrastructure. We cannot do that without 
permitting of the pipelines and the gathering systems to do it.
    I would encourage you to look at that legislation. I think 
you can make a big difference here in terms of helping not only 
produce more energy but good environmental stewardship with 
your help and support for that legislation.
    Ms. LeBeau, any thoughts you might have in that regard?
    Ms. LeBeau. I actually had some very initial conversations 
with the Three Affiliated Tribes on the gas flaring issue. 
Those conversations and dialogue are ongoing.
    Senator Hoeven. I know expediting permitting infrastructure 
is something they very much want.
    Thank you.
    The Chairman. Senator Murkowski?

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

    Senator Murkowski. Thank you, Mr. Chairman. Thank you for 
the hearing.
    I too am honored that the Ranking Member has allowed me to 
join in his great piece of legislation. I think it is an 
important bill and I too hope we will able to see this advance 
through the Committee.
    We are seeing such an energy boom across this country. I 
have been to North Dakota, my colleague's State; I was out in 
New Mexico, Texas and Colorado over this recess. We are seeing 
this boom everywhere. Yet our Indian tribes on the reservation 
are seemingly being left out due to bureaucratic delays with 
the Federal Government.
    It gives tribes the impression that the government doesn't 
trust them to handle their own energy development on their 
lands. I heard that frustration.
    About 43 years ago in Alaska, we did something different. 
We gave Alaska Natives collective title to own their own lands 
under ANCSA. Today our Alaska Native corporations are among the 
largest energy and mineral producers in our State. They are 
exploring for natural gas, for oil and are actively developing 
mineral resources.
    Our Native corporations continue to make investments in the 
State and are really changing the energy landscape. Whether it 
is through development of hydropower, we are seeing a great 
deal of wind power developed in our coastal communities and our 
villages, or whether conventional energy development.
    Nearly nine years after passage of EPACT, the Energy Policy 
Act of 2005, we still have yet to see a tribe in the lower 48 
assume regulatory powers over the energy development on tribal 
lands. We do have to recognize that there are considerable 
missed opportunities and how we can address these policies to 
help even that playing field, to get these opportunities, to 
really make a difference with our tribes. This is what this is 
all about.
    Secretary Washburn, today in the Federal Register, you 
issued a proposed rule establishing a process for tribes to 
take lands into trust in Alaska. As I understand it--just me 
for the first time looking at this proposed rule you announced 
today--it raises questions from my perspective, probably more 
questions than answers.
    It clearly represents a departure from 43 years of 
established policy in this area in which Alaska Natives took a 
different course. We deviated from the failures of the 
reservation system, set up something that was pretty novel with 
ANCSA.
    I want you to know that I am reviewing your proposed regs 
in view of its potential impact on Alaska. I will have some 
questions that I will submit for the record and would 
appreciate your responses to them at that time.
    I want to use the balance of may time this afternoon to 
talk about the issues as they relate to price of energy in 
Alaska because as we all know we have abundant resources, we 
don't have any shortage there but we have an energy crisis. We 
have an energy crisis in our rural Native communities because 
of geography, of the distances and the economies of scale.
    We had Kawerack testify to this Committee during our energy 
roundtable last summer, talking about aging infrastructure, 
high construction costs and antiquated technology. You are in a 
region where gasoline is costing you about $7 a gallon. In the 
AVCP region in the YK Delta, you are looking at $600-$800 for a 
heating bill, your heating bill per month. Understanding what 
we can do to reduce these costs has been so paramount to so 
many in Alaska.
    This is for you both. You're going to be looking to take 
lead on renewable energy development. You are bringing together 
some stakeholders in renewable energy development and focusing 
on building these public/private partnerships.
    I'm trying to understand exactly what this might mean in 
terms of how we can deal with some of our high cost issues when 
talking about these public/private partnerships. Effectively, 
what can Alaska tribes expect from this?
    One of the things AVCP is considering is in an effort to 
reduce energy costs, one thing we are looking at is the 
transportation costs and the possible development of an energy 
freight corridor that could connect the Kuskokwim River 
villages with the Yukon River villages. They are only separated 
by about 20 miles of land but how you can kind of knit all of 
this together to save costs is something that is worthy of 
consideration.
    Can either of you or both of you explain to me how you 
envision development of these public/private partnerships that 
might make a difference in reducing energy costs?
    Mr. Washburn. I'll say a few words and then maybe Director 
LeBeau can address the question.
    In the first four years of the Obama Administration, we 
focused on massive utility scale type projects, multiple 
megawatt type projects, things that take a lot of financing to 
produce. I think one of the insights we have developed over the 
last couple of years is we need to focus a lot more on local 
community scale projects that can help a small community like 
that.
    It may not be multiple megawatts and may not be hundreds of 
millions of dollars but it is very important to that community. 
I frankly find inspiring some of the things going on in Alaska. 
I was in King Cove not too long ago and they have a wonderful 
hydro facility that works great, saves the community a lot of 
money and saves the earth because it takes less hydrocarbon 
emission to deliver gas and fuels to the community.
    I think we have kind of pivoted, kind of turned a corner 
that I think will be good for Alaska. I think that is one of 
the reasons for the public/private partnerships. Private 
entities can make a big difference as well whenever you're 
talking about community scale projects.
    Senator Murkowski. Ms. LeBeau?
    Ms. LeBeau. I will try to cover a couple things I think 
might be of particular interest to you, Senator, and a bit of 
an update.
    My office in the last three years has duly noted the issues 
and unique challenges in Alaska and how they could be better 
addressed by the Department of Energy. In keeping with that and 
also recognizing that almost half the tribes in the United 
States are in Alaska, I can say this year our budget reflects 
that. Almost half of our entire budget is dedicated to Alaska.
    I would also mention--I know this is of particular interest 
to you--we also have hired a full time person and he is now 
stationed in Anchorage.
    We are very, very committed to working with Alaska Native 
governments and communities.
    On the public/private partnership side, this is a dialogue 
in which we are keenly interested and I think it will be 
ongoing. I will note that one area of interest has been talking 
to the Alaska Native regional corporations, folks like Cook 
Inlet and others who have invested in renewable energy 
projects. We are trying to get some lessons learned from them 
on what the motivations are, how those investments are doing 
and if those could be leveraged into Native communities 
throughout Alaska as well.
    We are very much focused on and providing a lot of 
technical assistance and funding towards trying to answer the 
questions of what is the best way to integrate renewables and 
microgrids and incorporate deployment of wind and diesel. I 
think that is one solution for a lot of Native communities. 
That is of particular interest and we are still learning some 
lessons on the best way to integrate those types of 
technologies in addition to microgrids.
    I think once we can answer that question as well as 
microgrid and renewable integration questions, it will help 
industry and others investing in those types of systems and 
with economies of scale, where we have more interest and 
settling on some technology solutions, and I think you will see 
the prices of those systems come down.
    Those are two areas I wanted to share with you today.
    Senator Murkowski. I thank you. Know that I am very 
interested in how we might be able to make these public/private 
partnerships work. I know the tribes are hopeful as well.
    I will have some additional questions also for you, 
Director LeBeau, in terms of specifics on the budget for the 
START program in Alaska, how many villages you anticipate 
serving and all that. I will submit those for the record.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    I think there will probably be many additional questions 
because we are not going to have a second round of questioning 
for both of you.
    I want to thank you both for your testimony. I appreciate 
your being here today.
    I would also say it was four or five weeks ago, we had a 
hearing on several bills I had asked you, Kevin, and a lady by 
the name of Lillian Sparks Robinson, to give their concerns to 
us so we could get working on them.
    One of them was the bill of Senator Hoeven, the Children's 
Safety, and the other one was Senator Murkowski's job training 
bill. The other one was an IHS issue, and I say this because 
hopefully they are watching, because I wanted to get their 
concerns. We haven't received them yet, so you need to kick 
whoever needs to be kicked to get us that information so we can 
get to working on that. It is critically important for Indian 
country as we move forward.
    That being said, thank you both for being here. I 
appreciate it.
    Now I would like to invite our second panel to come 
forward. The first panelist is the Honorable Carole Lankford--
whom I know very well--the Vice Chair of the Confederated 
Salish and Kootenai Tribes of the Flathead Reservation in 
Montana. We appreciate your making the long haul out here, 
Carole.
    Then we have the Honorable Michael O. Finley, representing 
both the Colville Tribes of Washington and the National 
Congress of American Indians. It is always good to have you 
here, Michael.
    Next, we have the Honorable Aletha Tom, Chairwoman of the 
Moapa Band of Paiute Indians of Nevada. It is very good to have 
you here, Aletha.
    Lastly, we will hear from the Honorable James ``Mike'' 
Olguin, Acting Chairman of the Southern Ute Indian Tribe. We 
met with Mike this morning. We look forward to your testimony.
    With that, the same rules apply as earlier. You have five 
minutes. Please keep it to five minutes so it gives us time for 
questions. Your entire written testimony will be made a part of 
the record. That is what is really important, so if you could 
hit the highlights, we would appreciate it.
    We will start with you, Carole. It is good to have you 
here.

            STATEMENT OF HON. CAROLE LANKFORD, VICE 
      CHAIRWOMAN, CONFEDERATED SALISH AND KOOTENAI TRIBES

    Ms. Lankford. Thank you very much.
    Chairman Tester, Vice Chairman Barrasso and members of the 
Committee, my name is Carole Lankford and I am Vice Chair of 
the Tribal Council of Confederated Salish and Kootenai Tribes.
    This is an exciting time for CSKT as we prepare to purchase 
Kerr Dam, a nearly 200 megawatt hydroelectric facility located 
in the heart of the Flathead Reservation. We will soon become 
the first tribe in the country to fully own, operate and manage 
its own hydroelectric power facility.
    We are very proud of the role and are already one of the 
largest employers in western Montana and in helping our State's 
economy. The acquisition of Kerr will be a big step in 
furthering our supportive role in the economy of our State.
    Owning and operating this dam will mean taking control of 
an important tribal resource that will produce clean energy as 
well as provide economic benefit to our people, our government 
and the local economy.
    Additionally, the tribes are currently utilizing a Federal 
grant to explore the feasibility of a biomass facility that can 
be built on the reservation. This has the potential of creating 
more renewable energy and jobs on the reservation.
    As CSKT prepares to become a major producer of clean and 
renewable power, we appreciate the opportunity to share our 
thoughts on S. 2132. We commend Senator Barrasso and the co-
sponsors of this bill for introducing this important 
legislation and for your dedication to assisting Indian tribes 
in the development of energy resources while helping to both 
generate jobs and growth on reservation economies.
    Our detailed statement provides information about some of 
our energy programs and goals and highlights provisions in S. 
2132 we believe are of particular importance to CSKT. Our 
tribes support this legislation and are particularly pleased 
with Section 201, Issuance of Preliminary Permits or Licenses, 
which would give tribes the same preference for acquiring hydro 
licenses that States and municipalities have.
    We also are particularly supportive of Section 202 of the 
Tribal Biomass Demonstration Project which would provide 
funding for biomass demonstration projects on four 
reservations. Both of these provisions could help CSKT as well 
as other tribes to further develop their economies and become 
more self sufficient.
    CSKT has always strongly supported the Federal Government's 
initiatives towards promoting tribal self-governance. We see 
implementation of Tribal Energy Resource Agreements, TERAs, as 
consistent with these initiatives.
    In particular, CSKT supports allowing tribes to take over 
environmental review functions that are now vested in the 
United States pursuant to the National Environmental Policy 
Act. To the extent that any TERA provision supports tribal 
self-governance, we support it.
    We utilize the weatherization program on our reservation 
and have a good working relationship with the State in working 
with them on this program. We support the self-governance 
provision for weatherization in S. 2132, but it is unclear to 
us whether in the name of self-governance, we might 
unintentionally end up with less funding pursuant to S. 203 
than we presently receive.
    CSKT strongly supports the proposed bill expanded process 
and consultation with Indian tribes which will improve tribal 
sovereignty and autonomy over some of the energy resources that 
form the pillar of tribal culture and governance.
    In particular, it is important to increase Federal 
technical assistance in the interest of Indian tribes. CSKT has 
a continued benefit from such assistance in more energy areas 
and is welcome and appropriate.
    Much of our comments focused on CSKT's acquisition of Kerr 
Dam but it is emblematic of harnessing energy resources for 
electric production, generation, transmission and distribution.
    Beyond technical support, increasing tribal autonomy to 
increase and execute certain business agreements and rights-of-
way moves in the right direction of promoting tribal governance 
and reducing bureaucratic impediments to governance. The 
combination of increasing capacity and thereby increasing self-
governance is right and supported.
    Many tribal governments struggle to find energy activities 
and as such CSKT strongly supports the bill's furthering 
financial assistance in lieu of Federal activities. This may 
promote tribal employment, self-governance and self-
determination.
    Thank you for the opportunity to testify before the 
Committee.
    [The prepared statement of Ms. Lankford follows:]

     Prepared Statement of Hon. Carole Lankford, Vice Chairwoman, 
                Confederated Salish and Kootenai Tribes
    Chairman Tester, Vice Chairman Barrasso and Members of the 
Committee:
    Thank you for the opportunity to testify on behalf of the 
Confederated Salish and Kootenai Tribes (``CSKT'' or ``Tribes''). CSKT 
has 8,000 members, the majority of whom live on the 1.3 million acre 
Flathead Reservation located in Western Montana--an area we have 
inhabited since time immemorial.
    This is an exciting time for CSKT as we prepare to purchase Kerr 
Dam, a nearly 200 Megawatt hydroelectric facility that is located in 
the heart of the Flathead Reservation. Owning and operating this dam 
will mean taking control of an important tribal resource that will 
produce clean energy, as well as provide an economic benefit to our 
people, our government and the local economy. Additionally, the Tribes 
are currently utilizing a federal grant to explore the feasibility of a 
biomass facility that can be built on the reservation. This has the 
potential to create even more renewable energy and jobs on our 
Reservation. As CSKT prepares to become a major producer of clean and 
renewable power, we appreciate the opportunity to share our thoughts on 
S. 2132. We commend Senator Barrasso and the co-sponsors of this bill 
for introducing this important legislation and for your dedication to 
assisting Indian tribes in the development of energy resources while 
helping to both generate jobs and grow reservation economies.
    Our testimony today will provide information about some of our 
energy programs and goals and will highlight provisions in S. 2132 we 
believe are of particular importance to CSKT. Our tribes support this 
legislation and are particularly pleased with Sec. 201, Issuance of 
Preliminary Permits or Licenses, which would give tribes the same 
preference for acquiring hydro licenses that states and municipalities 
have. Sec. 202, the Tribal Biomass Demonstration Project would provide 
funding for biomass demonstration projects on four reservations. Both 
of these provisions could help CSKT, as well as other tribes, to 
further develop their economies and become more self-sufficient.
    CSKT has always strongly supported the Federal Government's 
initiatives toward promoting tribal self-governance. We see 
implementation of Tribal Energy Resource Agreements (TERAs) as 
consistent with these initiatives. In particular, CSKT supports 
allowing Tribes to take over environmental review functions that are 
now vested in the United States pursuant to the National Environmental 
Policy Act (NEPA). To the extent that any TERA provision supports 
Tribal Self Governance we support it.
    Given our active interest in various aspects of tribal energy 
development and management, we again support the reintroduction of the 
Indian Energy bill in this Congress.
Background--Confederated Salish and Kootenai Tribes
    CSKT is composed of three confederated tribes, the Salish, the Pend 
O'reille, and the Kootenai. The Salish, Pend O'reille and Kootenai 
people have lived in the Flathead, Clark Fork, and Bitterroot River 
basins for thousands of years. CSKT formed a relationship with the 
United States by signing the Hellgate Treaty on July 16, 1855, whereby 
the tribes gave up most of their territory in exchange for reserving a 
permanent homeland called the Flathead Indian Reservation. In our 
Treaty, we also retained a number of identified off-reservation rights 
in the lands and waters that we ceded to the United States; rights 
which have been repeatedly reaffirmed by the highest courts in the 
United States.
    CSKT's utmost priority is to retain the sovereignty and the control 
over tribal resources that our ancestors preserved for us in the 
Hellgate Treaty.
Background--Kerr Hydroelectric Project
    Kerr Dam, located in the center of the Flathead Reservation on the 
Flathead River, has had a mixed history in the eyes of our people but 
in recent decades has been a symbol for both tribal sovereignty and 
tribal control over tribal resources. The dam was built in the 1930s--
with little to no input from the Tribes--and then operated by a 
private, non-Indian company during a low point of tribal sovereignty 
over its resources. Then, as Kerr Dam's license was up for renewal in 
1980, the leadership and vision of CSKT's elected officials at that 
time led to a negotiated settlement that now puts CSKT in the position 
to acquire Kerr Dam--an action the tribes will take on September 5, 
2015--and which will launch CSKT into a new era of control over our own 
resources, as well as being a producer of clean, renewable energy.
    CSKT is currently in the process of becoming the first tribe in the 
country to fully own, operate, and manage its own major hydropower 
facility. The Kerr Hydroelectric Project consists of: (1) a reservoir 
for storing water; (2) a dam for regulating the upstream reservoir 
level and downstream river flow; (3) three water intake structures 
called penstocks for directing water from the reservoir to the 
powerhouse; (4) a powerhouse for generating electricity; and (5) 
related shops, buildings, and roads.
    The Kerr Project can generate up to 188 megawatts of electricity at 
any one point in time. It is not always able to generate at its full 
capacity because the Flathead River flow is not usually high enough 
during the fall, winter, and early spring seasons. So, the Project 
operates at about 66 percent of its capacity in an average year.
    By acquiring the Kerr Project, CSKT will be restoring ownership and 
control over lands of the Flathead Indian Reservation, its treaty-
reserved homeland. By assuming control over Kerr Dam, CSKT will be 
asserting management and control over Flathead Lake and the Flathead 
River, two critically important water resources of the Flathead Indian 
Reservation. And by selling the electricity generated at the Kerr 
Project, CSKT will receive more income than it gets from rental of the 
Project land, which will allow the tribe to better meet the needs of 
our people.
    CSKT will have opportunities to develop businesses with the skill 
and ability to operate and maintain large energy generation facilities. 
The Tribes will have opportunities to develop businesses to sell 
electricity for a profit. We will create good-paying jobs in the local 
economy. CSKT will be developing a collection of financial and 
professional resources that should encourage development of other 
projects that might benefit CSKT in the future.
    Operating Kerr Dam will thus not only give CSKT control once again 
over the natural resources that the dam utilizes and affects, but it 
will also provide the tribe with much needed revenue to pay for and 
improve our tribal programs. We are already one of the largest 
employers in western Montana and are very proud of the role we play in 
creating jobs and helping the state's economy. Taking ownership of Kerr 
Dam will assure we can continue helping our people, our region and our 
state's economy.
Background--Kerr Project License
    The Federal Energy Regulatory Commission (FERC) issued the first 
license for the Kerr Project for a 50-year term in 1930 to a company 
owned by the Montana Power Company (MPC). When the Project was due to 
be relicensed in 1980, CSKT competed with the MPC for the license. 
After five years of the FERC issuing one-year licenses to MPC, CSKT and 
MPC came to a negotiated settlement and pursuant to that agreement the 
FERC issued a license jointly to CSKT and MPC in 1985. In the new 
license, MPC had the right to occupy and use the Project for the first 
30-years of the license term (1985-2015) and CSKT had the right to 
occupy and use the Project for the last 20-years of the license term 
(2015-2035). After operating the Project for 14 years, MPC transferred 
its interest in the license and sold its ownership interest in the 
Project to PPL Montana in 1999. In order to exercise its right to take 
over the Project, CSKT has to pay a conveyance price equal to 
$18,289,798. \1\ Once it pays that amount, CSKT will become the sole 
licensee and will own and control the entire Project. We have been 
setting aside money every year since 1985 in order to buy Kerr Dam.
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    \1\ http://energykeepersinc.com/wp-content/uploads/2014/03/Salish-
v-PPL-MT-Final-Award-77-198-0041-12-2-copy.pdf at p. 27.
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Background--Energy Keepers, Incorporated
    Energy Keepers, Incorporated (EKI) is a for-profit corporation 
wholly owned by the Confederated Salish and Kootenai Tribes. EKI was 
chartered by the United States Department of the Interior pursuant to 
Section 17 of the Indian Reorganization Act of 1934 (25 U.S.C.  477). 
EKI's primary purpose is to act on behalf of CSKT to acquire, 
construct, manage, operate, and maintain the Kerr Hydroelectric 
Project, and its related assets, so as to provide electricity, flood 
control, and environmental protection for regional needs and to make a 
profit from the sale of electrical energy products, consistent with the 
terms of the FERC license for the Project. EKI employs fifteen skilled 
staff members with expertise in business management, engineering, 
hydropower plant operations, accounting, hydrology, power marketing, 
human resources, and law. EKI has established its main office in 
Polson, Montana on the Flathead Reservation.
Particular Provisions of S. 2132 Supported By CSKT: Section 201 and 
        Section 202
1. CSKT Supports Section 201 of Senate Bill 2132 Amending the Federal 
        Power Act to Place Indian Tribes on the Same Footing as States 
        and Municipalities Regarding Preliminary Permits for Original 
        Hydropower Licenses
    The Confederated Salish and Kootenai reserved the Flathead Indian 
Reservation to themselves as a homeland by the terms of the Treaty of 
Hellgate (12 Stat. 975, July 16, 1855). The Flathead River is a central 
hydrologic feature of the Flathead Indian Reservation. There may be 
sites on the Flathead River within the boundaries of the Flathead 
Indian Reservation that become subject to exploration for establishment 
of hydropower generation facilities. Currently, Section 7(a) of the 
Federal Power Act (16 U.S.C. 800(a)) provides a preference to States 
and municipalities in the grant of permits for development of such 
potential sites. Providing this preference to any government other than 
CKST is inconsistent with the purpose and intent of Article II (i.e. 
homeland reservation clause) of the Treaty of Hellgate. Accordingly, in 
order for the United States to honor the terms of the Treaty, it is 
important that it correct this error in the law by amending Section 
7(a) so that CSKT is not disadvantaged in protecting and/or developing 
hydropower generation sites on its own treaty-reserved homeland.
    Providing CSKT with preference in hydro-licensing is important for 
a number of reasons. These reasons are briefly listed below.

        1.  Respect/preserve Flathead Reservation as CSKT treaty-
        reserved homeland.

           a. Consolidate prospective FERC licensee interests in 
        Flathead River with pre-existing CSKT land ownership rights.

           b. Affirm sovereignty.

        2.  Facilitate/support/encourage CSKT self-governance by 
        facilitating the internal development of CSKT Indian trust land 
        by CSKT Indians.

           a. Avoid the destabilizing influence that a non-resident 
        corporate licensee would likely bring to the Flathead 
        Reservation economy (e.g. the Kerr Project history shows a 
        continual repetitive pattern of litigation, bankruptcy, and 
        corporate transition by the FERC licensee for the Kerr 
        Project).

           b. Avoid the forced introduction of a State or municipal 
        sovereign into the Flathead Reservation with concomitant 
        potential for jurisdictional conflict over their regulatory and 
        legal affairs.

           c. Respect and restore CSKT's sovereign right to administer 
        to the health, safety, and welfare of Flathead Reservation 
        communities by providing CSKT preferential treatment regarding 
        managerial control over critical electrical infrastructure and 
        flood control assets located on the Flathead Reservation.

        3.  Respect/preserve CSKT management control of Flathead 
        Reservation treaty-reserved natural resources.

           a. Control of Flathead River flows.

           b. Administration of mitigation activities implemented in 
        response to environmental impacts caused by any newly-licensed 
        FERC project.

        4.  Provide CSKT with the opportunity to realize the economic 
        benefit from sale of electrical output from any new project 
        resulting in:

           a. Revenues from sale of electricity.

           b. Revenues from headwaters benefits.

           c. Revenues from providing ancillary power services.

        5.  Provide much-needed employment opportunities for CSKT 
        members emerging from the recession in a climate of high 
        unemployment and poverty.

           a. Exploration, construction, operation and maintenance of 
        any new project.

           b. Mitigation of the cultural and environmental impacts 
        caused by project impacts.

           c. Administration and management of the FERC license and the 
        electricity generated for sale at any new project.

        6.  Provide entrepreneurial opportunities for CSKT-owned 
        businesses and CSKT member-owned businesses, including:

           a. Energy Keepers, Incorporated

           b. Contractors and subcontractors for services.

2. CSKT Supports Inclusion of Section 202 In Senate Bill 2132 for the 
        Purpose of Providing for Establishment of Four Indian Tribal 
        Biomass Demonstration Projects Each Year Pursuant to Forest 
        Stewardship Agreements Between an Indian Tribe and The 
        Secretaries of Agriculture or Interior
    The management of forest resources is a complex business involving 
climatology, silviculture, forestry, wildlife biology, hydrology, 
fisheries management, archeology, tribal cultural preservation, range 
science, weed management, and prescribed fire and fuel treatment. The 
management challenge is becoming more daunting because of economic 
depression in the timber industry, insect infestations that threaten 
forest health, and anticipated changes in climate.
    CSKT does not anticipate improvement in the economic conditions 
within the timber industry. Although CSKT Forestry has been able to 
sustain a base level of timber harvest in CSKT forests for the past ten 
years, that level is significantly reduced from harvest levels 
sustained throughout the forty-year period prior to that. Accordingly, 
Tribal people who earn their living planting, managing, harvesting, and 
processing forest products have endured a difficult economic period 
during the past decade. CSKT is searching for new types for forest 
products and new economic markets to sell those products into.
    CSKT forests, of course, continue to photosynthesize, grow and 
develop, sequestering carbon and producing woody biomass as a result. 
CSKT forests are producing more woody biomass than is being harvested. 
This excess productivity results in a significant accumulation of 
biomass in the forest that is unhealthy because it results in older 
less-diverse forest stands that decay over time and create 
opportunities for insect infestation.
    Our Reservation is located on the crown of the continent at the 
headwaters of the Flathead River Basin in Western Montana. It is 
beautiful mountainous country that is reliant on season changes in the 
rainfall, temperature, and sunlight to sustain a rich environment. 
Indications are that changes in climate will result in more variability 
in conditions from year-to-year and more intensity in individual 
weather events. Accordingly, it is likely that there will be periods of 
significantly increased temperature and reduced precipitation that 
might last for several years. Such conditions will add stress to the 
forest's ecological community that will result in a concentration of 
diseased, dead and downed timber in steep mountainous terrain that will 
be combined with hot, dry and windy climatological conditions to cause 
dangerous wildfires.
    CSKT is not alone in its plight or its concern for revitalizing the 
forest products economy, enhancing forest health, and protecting 
against destructive wildfire. The boundaries of the Flathead 
Reservation adjoin federal lands under management authority of the 
Flathead and Lolo National Forests. We know that our neighboring forest 
products workers and federal land managers are also grappling with 
conditions similar to the ones we face.
    One way to address the economic, forest health, and wildfire 
conditions is to harvest forest biomass and burn it in a controlled 
environment that can capture the heat from burning and utilize it to 
generate electricity. CSKT is currently conducting an engineering 
feasibility assessment project regarding use of CSKT forest biomass 
products as a renewable energy resource for generation of electricity. 
In conducting our feasibility assessment, it has become apparent to us 
that securing a steady local fuel supply is a key factor for project 
success. We therefore, applaud the inclusion of Section 202 within S. 
2132. This section authorizes and directs the Secretaries of 
Agriculture and Interior to enter into forest stewardship agreements 
with Indian tribes for performance of four demonstration projects each 
year. As CSKT proceeds with its biomass generation feasibility 
assessment project, we will need to identify local sources of biomass 
fuel in sufficient quantity to support long-term sustainable generation 
of electricity. The forested lands of the neighboring Flathead and Lolo 
National Forests would be excellent sources of such biomass. In the 
event our project shows that development of a project is in fact 
economically viable, then there is a high likelihood that CSKT would 
seek to secure such a demonstration project for a period of 20-years. 
CSKT strongly supports the concept of biomass demonstration projects 
and advocates for inclusion of Section 202 within S. 2132.
Section 203. Weatherization Assistance Program
    Section 203 of the bill would amend the Energy Conservation and 
Production Act of 1976 (42 U.S.C.  6863(d)) to change the process 
through which tribes can seek direct funding from the Department of 
Energy's Weatherization Assistance Program. Under the existing law 
these funds are allocated to states.
    The amendments to Sec. 203 would provide that Tribes can receive 
direct funding on behalf of their low income members if DOE makes a 
determination that ``the low-income members of an Indian tribe are not 
receiving benefits under this part that are equivalent to the 
assistance provided to other low-income persons in such State''. 
Section 203 would allow a Tribal organization serving low-income Tribal 
members to apply to DOE for a direct grant, and DOE would only have to 
determine that the services to be provided through the tribe would be 
equal to or better than services through the state.
Montana Weatherization Program
    The State of Montana, through the Montana Department of Public 
Health and Human Services, offers a Weatherization Program that helps 
participants to improve the heating efficiency of their homes and thus 
reduce their energy consumption. \2\
---------------------------------------------------------------------------
    \2\ Montana currently maintains a Tribal Energy Assistance 
eligibility referral directly to the CSKT Lands Department. http://
www.dphhs.mt.gov/programsservices/energyassistance/
eligibilityoffices.shtml#tribal. 
---------------------------------------------------------------------------
    CSKT currently has a sub-contractor relationship with the State 
whereby the Tribes administer the state's weatherization assistance 
program for Tribal members. The State takes a small percentage of 
overall available funds for contract management but it is possible that 
this amount is less than it would cost CSKT to deal with federal 
funders. The program with the State has been working well.
Discussion
    Section 203 amendments would allow CSKT to seek direct allocation 
funding for the proportional amount of Tribal low income dollars that 
go to the State. It is unknown just how much this amount would be or 
how this could change the current funding rubric. It is possible that 
dollars would increase or decrease under a Tribal program pursuant to 
Section 203. \3\
---------------------------------------------------------------------------
    \3\ For example, if low income Tribal members apply for 
weatherization funds at a greater rate than similar low income non-
tribal members, then as a whole the tribal members could be getting 
more weatherization funds under the current rubric than would happen 
under Section 203's amendments. Therefore--it is possible that because 
of state income and application requirements Tribal members are getting 
more than their proportional share of funds, in which case the amount 
of dollars for Tribal members would decrease under the amendments. The 
opposite could also be true.
---------------------------------------------------------------------------
    CSKT is exercising (somewhat limited) self-governance by 
administering funds that come through the State, but the degree of 
self-governance could arguably be greater if CSKT received funding 
directly from the Department of Energy. The distinction warrants 
discussion and clarification.

        1.  Section 203's amendments could enhance self-governance but 
        would not greatly change the current weatherization program 
        whereby CSKT directly services its members. It is also possible 
        that these funds could be ``leveraged'' to apply for or match 
        other funding sources (although this is wholly speculative).

        2.  The financial uncertainties described above make it 
        difficult to conclude whether Section 203's amendments would 
        yield greater or lesser dollars for weatherization programs for 
        CSKT Tribal members.

        3.  Section 203 allows for Tribal exercise of weatherization 
        dollars only if there is a net financial benefit to Tribal 
        members. This is good from a financial perspective but not as 
        good from a self-governance angle. The program should be made 
        available to Tribes independent of any financial analysis--
        allowing Tribes to exercise greater self-governance as a 
        priority.

        4.  We are somewhat conflicted by Section 203 and would like to 
        discuss this more with Committee staff. As one of the original 
        10 Self Governance Tribes we are big supporters of Self 
        Governance but we certainly don't want to receive less 
        weatherization money than we are now receiving from the state. 
        Changes in the bill to clarify this point may be in order.
Conclusion
    CSKT strongly supports the proposed bill's expanded processes and 
consultations with Indian Tribes--which will improve tribal sovereignty 
and autonomy over some of the energy resources that form a pillar of 
tribal culture and governance. In particular it is important to 
increase federal technical assistance to interested Indian tribes. CSKT 
has and continues to benefit from such assistance--and more and in more 
energy-areas is welcome and appropriate. Much of our comments have 
focused on CSKT's acquisition of the Kerr Dam but it is emblematic of 
harnessing energy resources for electric production, generation, 
transmission, and distribution on--and off of--tribal lands.
    Beyond technical support, increasing tribal autonomy to create and 
execute certain business agreements and rights-of-way moves in the 
right direction of promoting tribal governance and reducing 
bureaucratic impediments to governance. The combination of increasing 
capacity and thereby increasing self-governance is right and supported. 
Many tribal governments struggle to fund energy activities and as such 
CSKT strongly supports the Bill's furthering financial assistance in 
lieu of federal activities. This may promote tribal employment, self-
governance, and self-determination.
    As the history of Kerr Dam's construction and--finally--the return 
of its land and resources to CSKT underscores, the bill's provisions 
for certification of tribal energy development entities will greatly 
enhance tribal governance and our ability to effectuate our visions for 
the future. We have created energy entities to develop tribal energy 
resources--and they should be appropriately recognized and supported by 
the Federal Government.
    Thank you for the opportunity to testify before the Committee 
today. This bill and other Congressional efforts to empower tribes to 
develop and manage their energy resources are important to us and other 
tribes. Your support for tribal self-determination and tribal 
sovereignty is greatly appreciated. Indian energy development is a key 
component of our ability to control our destiny and provide for our 
people.
    We look forward to working further with Congress to figure out how 
CSKT and other tribes can further maximize our energy potential, and we 
invite future discussions on how to create win-win scenarios for both 
the tribes and the Federal Government.

    The Chairman. Thank you, Carole.
    Next we have Michael Finley representing NCAI and the 
Colville Tribes of Washington. Welcome, Michael. You may 
proceed.

        STATEMENT OF HON. MICHAEL O. FINLEY, CHAIRMAN, 
          CONFEDERATED TRIBES OF THE COLVILLE INDIAN 
         RESERVATIONS; FIRST VICE PRESIDENT, NATIONAL 
                  CONGRESS OF AMERICAN INDIANS

    Mr. Finley. Thank you, Mr. Chairman. It is an honor to be 
able to provide testimony before the Committee today.
    I want to acknowledge Vice Chairman Barrasso.
    I serve as Chairman to the Confederated Tribes of the 
Colville Reservation in northeast Washington State and as First 
Vice President of the National Congress of American Indians. I 
provide testimony on behalf of both today.
    I want to go back four or five years or even longer to 
where tribes talked about these changes and worked with this 
Committee on a number of occasions, having hearings on trying 
to get these very provisions done. I acknowledge Vice Chairman 
Barrasso for leading the charge on that a number of years ago.
    NCAI passed a resolution with overwhelming numbers not 
three weeks after that bill was introduced back in 2011. Tribes 
have been working heavily no these provisions and lobbying 
various congressional offices to try to get this pushed 
forward.
    I want to acknowledge at the outset we do appreciate this 
Committee's work on this. It is something really important to 
us. It strikes the very chord of what economic development is 
in Indian country and using our natural resources.
    As stated a number of times, we do have issues with the 
TERA because no tribes have entered any. We continue to have 
problems with what those provisions mean and whether or not 
that makes the best sense for tribes. Because no tribes have 
entered into it, we are looking at different scenarios within 
the provisions of this bill as introduced to try to circumvent 
some of those problems.
    Some are here at the administration level. We do need to 
submit those plans as tribes but we do need to have back and 
forth dialogue with the Federal Government in a timely manner 
on when those will be approved and implemented and used to the 
benefit of the tribes. That is why within there we have the 
provision about 270 days if you don't answer, we want them to 
be automatically approved.
    There are a number of other provisions under the TERA we 
feel would be beneficial to tribes and some of the cost savings 
that the Secretary would have the authority to delegate those 
monies or always be spent on those TERAs to the tribes for the 
benefit of those projects outlined within those agreements.
    I wanted to touch a bit on more flexibility that we need 
within the appraisal processes of getting some of these leases 
approved that we'd like to have implemented within this 
legislation that would streamline a lot of things for tribes. 
There are a number of tribes that have difficulties getting 
from point A to point B. I know some of the oil and gas tribes 
who have given testimony in the past, and Senator Heitkamp 
alluded to it, that there are a lot of steps they have to go 
through.
    I think a lot of the things that we have as problems aren't 
just within the Energy Policy Act of 2005, there a number of 
others outlined within my written testimony provided a number 
of days ago.
    There is another provision that the Colville Indian Tribes 
are particularly interested in, the biomass demonstration 
projects. This would be a slight amendment to the Tribal Force 
Protection Act that would allow tribes greater flexibility to 
enter agreements with the U.S. Forest Service for contiguous 
U.S. Forest Service properties so those forests can be taken 
care of better by the tribes in their integrated resource 
management plans.
    A number of tribes have integrated resource management 
plans. We believe we are the national model. We take care of 
our forests and natural resources and in particular, our 
cultural resources and we do that process better than anyone. 
Our forests directly reflect the model of that.
    I think some of the provisions being introduced would allow 
us to expand that model into the areas of the U.S. Forest 
Service, create jobs in the economically depressed areas on my 
reservation which is Kevary County, the poorest county in the 
State of Washington. It would also provide opportunity for 
tribes in Alaska to enter similar agreements also outlined in 
that provision of the bill introduced today.
    There are a number of others in my written testimony but I 
will stop there. I appreciate the time, Mr. Chairman. I will 
stand for questions.
    Thank you.
    [The prepared statement of Mr. Finley follows:]

 Prepared Statement of Hon. Michael O. Finley, Chairman, Confederated 
   Tribes of the Colville Indian Reservation; First Vice-President, 
                 National Congress of American Indians
    Good afternoon Chairman Tester, Vice Chairman Barrasso, and members 
of the Committee. My name is Michael Finley and I am testifying today 
in my capacities as Chairman of the Confederated Tribes of the Colville 
Reservation (``CCT'' or the ``Colville Tribes'') and First Vice 
President of the National Congress of American Indians. I appreciate 
the opportunity to testify today on S. 2132, the ``Indian Tribal Energy 
Development and Self-Determination Act Amendments of 2014.''
    Both the CCT and NCAI strongly support S. 2132. Although not 
completely identical, all of the provisions in S. 2132 were included in 
Vice-Chairman Barrasso's Indian energy bill (S. 1684) that this 
Committee approved by voice vote and reported in the 112th Congress. 
The full membership of NCAI, in its 2011 annual meeting in Portland, 
Oregon, adopted a formal resolution supporting S. 1684 less than three 
weeks after the bill was introduced. I think that speaks volumes about 
how NCAI and Indian Country feel about Senator Barrasso's Indian energy 
bill and the extensive tribal consultation and outreach that preceded 
its introduction.
    The CCT is particularly supportive of Section 202, which would 
authorize a Tribal Biomass Demonstration Project. Not only would this 
provision encourage biomass utilization, it would also allow tribes to 
perform forest health projects and on neighboring federal forest and 
rangelands. With wildfire season rapidly approaching, this type of 
authority would provide the Colville Tribes and similarly situated 
tribes with immediate benefits if it were currently in effect.
    Because S. 2132 contains provisions that the Committee has 
previously approved and that would provide Indian country with 
immediate benefits, we ask that the Committee avoid making significant 
changes to S. 2132 that would delay or prevent its consideration and 
passage this year.
Background on the Colville Tribes and NCAI
    Although now considered a single Indian tribe, the Confederated 
Tribes of the Colville Reservation is a confederation of twelve 
aboriginal tribes and bands from all across eastern Washington State. 
The present day Colville Reservation is located in north-central 
Washington State and was established by Executive Order in 1872. The 
Colville Reservation covers approximately 1.4 million acres and its 
boundaries include parts of Okanogan and Ferry counties. The CCT has 
more than 9,400 enrolled members, making it one of the largest Indian 
tribes in the Pacific Northwest, and the second largest in the state of 
Washington. About half of the CCT's members live on or near the 
Colville Reservation. Of the 1.4 million acres that comprise the 
Colville Reservation, 922,240 acres are forested land.
    The Colville Reservation originally consisted of nearly three 
million acres and included all of the area north of the present day 
Reservation bounded by the Columbia and Okanogan Rivers. This 1.5 
million acre area, referred to as the ``North Half,'' was opened to the 
public domain in 1891 in exchange for reserved hunting and fishing 
rights to the CCT and its members. Most of the Colville National Forest 
and significant portions of the Okanogan National Forest are located 
within the North Half. Both forests are contiguous to the northern 
boundary of the Colville Reservation.
    NCAI is the oldest and largest American Indian organization in the 
United States. Tribal leaders created NCAI in 1944 as a response to 
federal termination and assimilation policies that threatened the 
existence of American Indian and Alaska Native tribes. Since then, NCAI 
has fought to preserve the treaty rights and sovereign status of tribal 
governments, while also ensuring that Native people may fully 
participate in the political system. As the most representative 
organization of American Indian tribes, NCAI serves the broad interests 
of tribal governments across the nation.
Overview of S. 2132
    As noted above, all of the provisions included in S. 2132 were 
considered and favorably reported by this Committee in the 112th 
Congress. These provisions are discussed in detail in Senate Report No. 
112-263. As such, the bill includes the following important proposals.
    First, as background, it takes an inordinate amount of time for the 
Department of the Interior to review and approve permits to drill, 
exploration and production agreements, rights of ways, and to approve 
other related energy agreements. Potential partners and development 
capital sit on the sidelines because it takes years to get anything 
approved by the Department. Indian Country needs an institutionalized 
answer to the ongoing challenge of burdensome bureaucratic processes 
and delay of tribal energy leasing and permitting.
    Title I of S. 2132 would provide increased technical assistance to 
tribes, increase access to existing energy grant and loan guarantee 
programs, and streamline the process for Indian tribes to enter into 
Tribal Energy Resource Agreements or ``TERAs.''
    With regard to TERAs, the bill would make many significant 
improvements to the TERA process under the Energy Policy Act of 2005. I 
will highlight just a few here.
    First, instead of having the BIA approve or disapprove a proposed 
TERA, under S. 2132 a proposed TERA would automatically go into effect 
after 270 days unless the BIA determines that there is a reason to 
disapprove the TERA. This is important because tribes cannot rely on 
the Federal Government to take action in a timely way.
    The bill also includes a funding mechanism for tribes in carrying 
out a TERA. Some tribes have expressed concerns about the costs of 
implementing a TERA and would want to have financial support for taking 
on the additional activities. In a section called ``Financial 
Assistance in Lieu of Activities by the Secretary,'' S. 2132 would 
create a process for the Secretary of the Interior (``Secretary'') to 
calculate the savings to the Department resulting from a tribe entering 
into a TERA and direct the Secretary to make that savings available to 
the tribe. This would provide funding to the tribe without impacting 
the Federal budget.
    S. 2132 would also clarify the liability clause of the 2005 Act. 
The bill would make it clear that the exemption from liability only 
applies to losses stemming from matters negotiated by the tribe itself; 
it does not extend to matters that are in the Secretary's control or 
for losses occasioned by the Department's failure to perform its 
obligations.
    Title II contains several miscellaneous provisions that would 
enhance the ability of Indian tribes to develop both renewable and 
traditional energy resources. Section 201 would amend the Federal Power 
Act to authorize the Federal Energy Regulatory Commission to give 
Indian tribes the same preference that states and municipalities can 
receive when that Commission issues preliminary permits or original 
licenses for hydroelectric projects.
    Section 203 would amend the home weatherization program under the 
Energy Conservation and Production Act to make it easier for Indian 
tribes to request and obtain direct funding from the Secretary of 
Energy. These changes are critical in that they would bring Indian 
tribes into closer parity with states in being able to access these 
weatherization funds.
    Section 204 would provide new flexibility for tribes to obtain 
appraisals of tribal mineral or energy resources by allowing tribes or 
certified, contract appraisers to prepare appraisals and imposing 
timeframes for Secretarial review and approval of the appraisals. 
Indian tribes have long complained of delays in obtaining appraisals 
for their trust resources, particularly for time sensitive transactions 
with potential economic development benefits. These changes would 
provide a measure of certainty that the Secretary will approve 
appraisals of energy resources in a timely manner.
    Section 205 would amend the Long-Term Leasing Act to allow the 
Navajo Nation to enter into leases for the exploration, development, or 
extraction of any mineral resources without the approval of the 
Secretary, if the lease is executed under tribal regulations, approved 
by the Secretary and meets certain other requirements.
The CCT is Particularly Supportive of the Tribal Biomass Demonstration 
        Project in Section 202
    Section 202 would add a new section to the Tribal Forest Protection 
Act of 2004 that would require the Secretary of Agriculture (in the 
case of Forest Service land) and the Secretary of the Interior (in the 
case of Bureau of Land Management land) to enter into a collective 
total of at least four new contracts or agreements with tribes to 
promote biomass, biofuel, heat, or electricity generation each year of 
the five-year authorization. Section 202(c) would also authorize for 
Alaska Native Corporations one biomass demonstration project per year 
for FY 2015 through 2019.
    Renewable energy development such as biomass has been of particular 
interest to the Colville Tribes as it seeks new ways to promote on-
reservation economic development and diversify its economy. Although 
Section 202 requires the Secretaries to enter into a minimum number of 
contracts, the Secretaries would be responsible for jointly developing 
the eligibility requirements. In evaluating applications, the 
respective Secretaries must consider a variety of factors, including 
whether a project would improve the forest health or watersheds on the 
federal land and whether a project would enhance the economic 
development of the Indian tribe and the surrounding community.
    As the Committee is aware, many federal lands that are adjacent to 
tribal lands are in need of thinning, hazardous fuels reduction, and 
restoration activities to reduce the risk of catastrophic wildland 
fires, disease, and insect infestations. These risks are particularly 
severe in dry forested areas like the Colville Reservation, the 
southwestern United States, and other areas that do not receive 
significant rainfall. Indian tribes like the CCT are uniquely situated 
to carry out these activities because they have a vested interest in 
ensuring that neighboring federal lands do not pose fire or disease 
threats that will encroach on our tribal lands and threaten our 
communities.
    Section 202 also allows for tribal management land practices to 
apply to areas included in contracts or agreements entered into under 
demonstration projects. This would allow, for example, Indian tribes to 
incorporate cultural resource considerations into activities conducted 
on federal lands included in demonstration projects. Many have praised 
tribal land management practices as being far more efficient than those 
of their federal counterparts. Federal agencies, however, have been 
slow to incorporate these principles even on those federal lands that 
are contiguous to tribal trust lands. Section 202 would provide tribes 
with this much needed opportunity.
Conclusion
    The CCT and NCAI believe that S. 2132 will provide tribes with 
immediate benefits by removing structural barriers to energy 
development on tribal lands. We appreciate the Committee's 
consideration of these issues and look forward to working with the 
Committee to ensure passage of S. 2132. At this time I would be happy 
to answer any questions you may have.

    The Chairman. Michael, thank you for your testimony. I very 
much appreciate it.
    Next, we have the Chairwoman of the Paiute Indians of 
Nevada, Aletha Tom. Aletha, you may proceed.

STATEMENT OF HON. ALETHA TOM, CHAIRWOMAN, MOAPA BAND OF PAIUTES 
                             TRIBE

    Ms. Tom. Thank you, Mr. Chairman and members of the 
Committee.
    I am Aletha Tom, Chairwoman of the Moapa Band of Paiutes 
Tribe.
    My purpose in testifying today is to provide our story on 
energy development utilizing one of the most abundant natural 
resources, solar energy.
    Significant land holdings are important in developing solar 
energy. The Moapa Band of Paiutes has lived in southern Nevada 
since time immemorial. In 1874, the Moapa Band of Paiutes 
Reservation encompassed 2.2 million acres which stretched to 
the Colorado River in the south and Las Vegas to the east. 
However, subsequent government action reduced our land holdings 
to 1,000 acres.
    In 1980, we got back a portion of our ancestral land 
pursuant to P.L. 96-491 which restored 70,500 acres of land. 
Upon our land being returned, the Moapa Band of Paiutes have 
engaged in significant economic development opportunities by 
working with industry leading partners to establish large, 
commercial solar voltaic power.
    The Moapa River Indian Reservation's location is unique to 
other parts of Indian country because we have an energy 
corridor going through our reservation that contains power 
lines and gas lines. Additionally, adjacent to our reservation 
sits two power substations that have capacity to transport the 
renewable power produced by our solar plant. Hence, we are 
fortunate to be in this prime development location.
    Currently, the Moapa Band of Paiutes has three projects 
that will supply over 500 megawatts of renewable energy and we 
are also considering a fourth project that could bring in 
another 100 megawatts of clean renewable energy. This means we 
have the potential for 600 megawatts of clean energy that will 
not add any greenhouse gases to the atmosphere.
    Furthermore, we have talked with potential partners who are 
interested in building even more solar power on our lands.
    Government must act as a facilitator to produce more 
renewable energy. Currently, the Federal Government has made 
renewable energy investment very attractive by providing an 
investment tax credit for renewable energy that will end in 
2016. This tax credit provides incentives for companies who 
invest to receive 30 percent tax breaks for a renewable energy 
investment and significant depreciation tax.
    We want to see the Solar Investment Tax Credit extended to 
provide additional tax incentives for business to invest in 
Indian country. Of course, we want Indian country to benefit as 
energy producers, however, very few tribes would have the 
multi-millions or billions to invest in such large scale 
projects.
    If there was other government spending to invest so that 
tribes could capitalize more on the renewable energy market as 
energy producers, it would be the most favorable option.
    Tribes who want to engage in solar energy must be aware of 
the substantial transaction cost in developing these projects. 
Developers can facilitate the projects by assisting with 
biological and environmental compliance requirements by 
supplementing the expertise with the Federal agencies in charge 
of overseeing these regulations.
    Substantial costs can also be attributed to regulatory 
compliance. Tribes must be prepared to absorb these known and 
unknown costs.
    Tribes interested in renewable energy assistance should 
work with the Department of Energy, Office of Indian Energy who 
will provide integral technical assistance to better understand 
how tribal projects fit into the renewable energy market.
    Tribes can utilize the government-to-government 
relationship to push for legislation and administrative action 
that will facilitate renewable energy investment on Indian 
land. Senator Harry Reid has been a leader on this issue in 
Nevada and attended the groundbreaking for the first utility 
scale solar project on tribal lands.
    As the energy industry changes so do relationships. Nevada 
Power is now owned by Nevada Energy, which is owned by Warren 
Buffett. We have worked with the new Nevada Energy president, 
Paul Caudill and we hope to work positively to develop new 
renewable energy projects with the company.
    In conclusion, we have outlined that renewable solar energy 
projects can be accomplished with participation of Federal and 
State governments. We endorse government going down this green 
road and supporting policies that promote substituting 
greenhouse gases for clean energy.
    We appreciate the Senate Committee on Indian Affairs for 
holding this worthwhile hearing and listening to the input from 
the Moapa Band of Paiute Tribes.
    Thank you.
    [The prepared statement of Ms. Tom follows:]

   Prepared Statement of Hon. Aletha Tom, Chairwoman, Moapa Band of 
                             Paiutes Tribe
    Mr. Chairman and Members of the Committee,
    Good afternoon. I am Aletha Tom, Tribal Chairwoman of the Moapa 
Band of Paiutes. My purpose in testifying today is to provide our story 
on Energy Development utilizing one of the most abundant natural 
resources; solar energy.
    Significant land holdings are important in developing solar energy. 
Since time immemorial, the Southern Paiutes, the Nuwu, have occupied 
the Southern Great Basin, including Southern California, Southern 
Nevada, Northern Arizona, and Southern Utah. The Moapa Band of Paiutes 
is one of several bands, which make up the entire Southern Paiute Tribe 
of Nuwu. In 1874, the Moapa Band of Paiutes Reservation encompassed 2.2 
million acres which stretched to the Colorado River in the South and 
Las Vegas to the east. However, subsequent government action reduced 
our land holdings to 1000 acres. In 1980 we got back a portion of our 
ancestral land pursuant to P.L 96-491 which restored 70,500 acres of 
land. Upon our returned land, the Moapa Band of Paiutes have engaged in 
significant economic development opportunities by working with industry 
leading partners to establish large, commercial solar voltaic arrays.
    The Moapa River Indian Reservation's location is unique to other 
parts of Indian Country because we have an energy corridor going 
through our Reservation that contains electronic power lines and gas 
lines. Additionally, adjacent to our reservation sits two power 
substations that have capacity to transport the renewable power 
produced by our solar plant. Hence, we are fortunate to be in this 
prime development location.
    Currently, the Moapa Band of Paiutes, has three projects that will 
supply over 500 Megawatts of Renewable Energy and we are also 
considering a forth project that could bring in another 100 megawatts 
of clean renewable energy. This means we have the potential for 600 
megawatts of clean energy that will not add any green-house gases into 
the atmosphere. Furthermore, we have talked with potential partners who 
are interested in building even more solar voltaic systems on our land.
    Government must act as a facilitator to produce more renewable 
energy. Currently the Federal Government has made renewable energy 
investment very attractive by providing an investment tax credit for 
renewable energy that will end in 2016. This tax credit provides 
incentives for companies who invest to receive thirty percent tax break 
for renewable energy investment and significant deprecation tax.
    We want to see the Solar Investment Tax Credit (ITC) extended to 
provide additional tax incentives for business to invest in Indian 
Country. Of course, we want Indian Country to benefit as energy 
producers, however, very few tribes would have the multi-millions or 
billions to invest in such large scale projects, but if there was other 
government spending to invest so that Tribes could capitalize more on 
the renewable energy market as energy producers it would be the most 
favorable option.
    Business entities who rent tribal land should not be afraid to 
comply with the substance of our Tribal Employment Rights Ordinance 
(TERO). TERO requires Indian Preference in employment, subcontracting, 
and business opportunities on the reservation. Complying with TERO is 
not burdensome because it puts the onus on the tribes TERO officer to 
provide lists of employable natives and potential training for 
employment opportunities. Once the tenant company engages the TERO 
officer and provides a request for assistance the TERO officer has the 
burden to produce lists of qualified individuals for the tenant 
company. The tenant company can go beyond entry level and skilled 
positions it provides additional capabilities for Tribal members to 
move up to executive positions within the tenants company. Complying 
with TERO is a vital component to the success of these projects. It 
provides immediate access to workforce, it provides opportunities to 
strengthen the workforce, and strengthens the socioeconomic status of 
the tribe and its community.
    Tribes who want to engage in solar energy must be aware of the 
substantial transaction cost in developing these projects. Developers 
can facilitate the projects by assisting with biological and 
environmental compliance requirements by supplementing the expertise 
with the federal agencies in charge of overseeing these regulations. 
Substantial costs can also be attributed to legal analysis and 
reviewing each stage of regulatory compliance. Tribes must be prepared 
to absorb these known and unknown costs.
    If the Tribe has the financing to complete a renewable energy 
project then this is the optimum route to develop a project. However, 
in the beginning of a project, do not be surprised to work with a 
development team, skilled in obtaining energy contracts called Purchase 
Power Agreements with major utilities, based upon sound resource data. 
Investors will then be interested in funding these projects for the 
Solar Investment Tax Credit.
    Tribes that are interested in renewable energy assistance should 
work with the Department of Energy, Office of Indian Energy who will 
provide an integral technical assistance to better understand how 
Tribal projects fit into the renewable energy market.
    Tribes can utilize the government to government relationship to 
push for legislation and administrative actions that will facilitate 
renewable energy investment on Indian land. Senator Harry Reid has been 
a leader on this issue in Nevada and attended the groundbreaking for 
the first utility scale solar project on tribal lands.
    Limited waivers of certain Tribal Laws are inevitable. Tribes need 
to work diligently to protect their sovereignty but be aware that the 
investors also want to limit their financial risk as they invest multi-
millions and billions of dollars in these projects. Investors also want 
longer term deals which have been facilitated by your committee who 
recently passed the HEARTH act that allows for longer term ground 
leases.
    Do not back down from fighting for your rights. At the same time 
that the Tribe was beginning to venture into renewable energy, the 
Tribe sued the old Nevada Power to close down their power plant located 
adjacent to the Reservation. The Tribe and the Sierra Club sued to shut 
down the Reid Gardner Power plant, which lies adjacent to our 
reservation and tribal citizens homes, because the pollution coming 
from the plant was detrimental to the health of our Tribal members. One 
result of the lawsuit and other political pressure contributed to the 
recent Nevada State legislation, SB 123, which directed Reid Gardner to 
close its 1, 2 and 3 stacks by the end of this year and the large stack 
by 2017.
    As the Energy Industry changes so do relationships. Nevada Power is 
now owned by Nevada Energy, a subsidiary of Mid American Holding 
Company, which is owned by Warren Buffett. We have worked with the new 
Nevada Energy President, Paul Caudill and we hope to work positively to 
develop new renewable energy projects with the company.
    In conclusion, we have outlined that renewable solar energy 
projects can be accomplished with participation of Federal and State 
Governments. We endorse government going down this green road and 
supporting policies that promote substituting green-house gases for 
clean energy.
    We appreciate the Senate Committee on Indian Affairs for holding 
this worthwhile hearing and listening to input from the Moapa Band of 
Paiutes. Thank you.

    The Chairman. Thank you, Aletha. We appreciate your input.
    Next, we will hear from Acting Chair of the Southern Ute 
Indian Tribe, Mike Olguin. Mike, you're up.

   STATEMENT OF HON. JAMES ``MIKE'' OLGUIN, ACTING CHAIRMAN, 
               SOUTHERN UTE INDIAN TRIBAL COUNCIL

    Mr. Olguin. Good afternoon, Chairman Tester, Ranking Member 
Barrasso and members of the Committee.
    I am Mike Olguin, Acting Chairman of the Southern Ute 
Indian Tribe. I am honored to appear before you today on behalf 
of my tribe and tribal council to provide testimony on S. 2132, 
the Indian Tribal Energy Development and Self Determination Act 
amendments of 2014.
    We fully support S. 2132 because it is another step towards 
maximizing tribal oversight and management of our own resources 
and minimizing Federal Government's role in these decisions.
    Over the years, this Committee has worked on a number of 
legislative proposals to help us with our primary and ongoing 
concerns, the delays and impediments to tribal energy 
development caused by Federal bureaucracy.
    With the price of natural gas at one-third of what it was 
only six years ago, you can easily understand the impact that 
multiyear delays in the approval of rights-of-way and other 
energy related transactions had and continues to have on our 
tribal economy.
    In my written statement, I describe the results of a 2009 
review conducted by our own tribal energy department of 
projects then awaiting approval from the Bureau of Indian 
Affairs. At the time, over 100 rights-of-way and permits were 
pending before the BIA and over half of those had been pending 
since 2007 or before. These delays cost the tribe more than $90 
million in direct revenue and because the price of gas dropped 
during that time, much more in lost opportunity costs.
    Because we are the largest employer in our region, these 
impacts are felt in the non-tribal community as well. Despite 
our concerted efforts to solve this ongoing problem, these 
bureaucratic delays and their financial impacts continue. We 
continue to believe the best way to minimize or eliminate these 
delays and their corresponding negative impacts is to support 
and enhance tribal decision-making and respect tribal authority 
and reduce the Federal role on our own lands.
    We have been working on various ways to do that for many 
years. For more than a decade, we have worked with this 
Committee on specifics. In 2002, our legal counsel wrote to 
your legal counsel about a possible approach that would allow 
tribes to elect to escape the Federal bureaucracy for mineral 
development purposes provided the Secretary has a reasonable 
indication that an electing tribe will act prudently once cut 
free.
    This proposal ultimately came to fruition in the Indian 
Tribal Energy Development and Self-Determination Act of 2005. 
That law gave tribes authority to manage their own energy 
development transactions without Federal oversight provided the 
Secretary of Interior was satisfied the tribe had the capacity 
to do so.
    As a pre-condition, the law required a tribe and the 
Secretary of Interior to first establish a master agreement or 
a TERA. We continue to believe that TERA provided an important 
avenue for tribes to assert greater authority over their own 
energy development. Unfortunately, no tribe has yet entered a 
TERA to take advantage of that promise.
    Each tribe likely has its own reason for not pursuing a 
TERA but we believe many concerns revolve around, one, the lack 
of Federal funding for tribes to assume additional duties under 
a TERA; two, the lack of clarity regarding what inherently 
Federal functions would be retained by the Federal Government 
after entering a TERA; three, public input requirements for 
tribal processes; and four, the extensive capacity 
demonstrations required before a TERA could be approved.
    My written statement contains a detailed review of these 
complex provisions but I would like to summarize a few of the 
most important changes S. 2132 would make.
    First, the legislation would expand the ability of tribes 
to demonstrate sufficient capacity to enter a TERA by including 
successful performance of other Federal 638 contracts on a 
basis for such demonstrations. These amendments would provide a 
clear standard we could easily meet.
    Second, S. 2132 would broaden the types of activities that 
could be included in the TERAs. For example, the bill includes 
addition of transactions related to renewable energy facilities 
and clarifies that TERAs may extend to pooling and 
communitization agreements affecting Indian energy minerals.
    Third, the bill would allow for cost sharing between the 
Secretary and a TERA tribe where the tribe's TERA activities 
have resulted in cost savings to the Secretary.
    Last, the bill would require that if the Secretary does not 
act upon a proposed TERA in 270 days, the TERA becomes 
effective on the 271st day.
    Taken together, these amendments would improve the chances 
that other tribes would enter TERAs. In addition, the bill 
would include amendments to support tribal biomass projects and 
allow tribes to conduct their own appraisals when such 
appraisals are required for project approval by the Federal 
Government.
    As detailed in my written statement, we strongly support 
these appraisal provisions and would further streamline BIA's 
review of many of the realty related transactions.
    With that, I am available for any questions.
    [The prepared statement of Mr. Olguin follows:]

  Prepared Statement of Hon. James ``Mike'' Olguin, Acting Chairman, 
                   Southern Ute Indian Tribal Council
I. Introduction
    Chairman Tester, Vice Chairman Barrasso and distinguished members 
of the Committee, my name is Mike Olguin and I am the Acting Chairman 
of the Southern Ute Indian Tribal Council. It is my great honor to 
appear before you today on behalf of the Southern Ute Indian Tribe in 
support of the ``Indian Tribal Energy Development and Self 
Determination Act Amendments of 2014,'' (S. 2132).
    Although this legislation was introduced just last month, we have 
been working closely with this Committee for years in an effort to 
obtain legislation further empowering Indian tribes to address energy 
needs and energy development opportunities. We were active participants 
in field hearings and legislative discussions that led former Chairman 
Dorgan to introduce S. 3752 in the summer of 2010. While that 
legislation did not become law, it served as a key building block for 
S. 1684, which was introduced in late 2009 and for S. 2132, which is 
before you today and is substantially similar to that earlier bill.
    In recent years, tribal leader after tribal leader has come before 
you to express concerns about the dire economic conditions in Indian 
Country, and to call for statutory, regulatory and policy changes to 
improve access to energy and for economic development for their 
constituents. Today, we hope that members of the Committee will 
collectively determine that the needs of Indian Country merit passage 
of S. 2132.
II. The Southern Ute Indian Tribe's Experience in Becoming the Premier 
        Indian Tribal Natural Gas Producer in the United States
    The Southern Ute Indian Reservation consists of approximately 
700,000 acres of land located in southwestern Colorado in the Four 
Corners Region of the United States. The land ownership pattern within 
our Reservation is complex and includes tribal trust lands, allotted 
lands, non-Indian patented lands, federal lands, and state lands. Based 
in part upon the timing of issuance of homestead patents, sizeable 
portions of the Reservation lands involve split estates in which non-
Indians own the surface but the tribe is beneficial owner of oil and 
gas or coal estates. In other situations, non-Indian mineral estates 
are adjacent to tribal mineral estates. When considering energy 
resource development, these land ownership patterns have significant 
implications that range from the potential for drainage to questions of 
jurisdiction. Historically, we have established solid working 
relationships with the State of Colorado and local governmental 
entities, which have minimized conflict and emphasized cooperation.
    Our Reservation is a part of the San Juan Basin, which has been a 
prolific source of oil and natural gas production since the 1940's. 
Commencing in 1949, our tribe began issuing leases under the 
supervision of the Secretary of the Interior. For several decades, we 
remained the recipients of modest royalty revenue, but were not engaged 
any active, comprehensive resource management planning. That changed in 
the 1970's as we and other energy resource tribes in the West 
recognized the potential importance of monitoring oil and gas companies 
for lease compliance and maintaining a watchful eye on the federal 
agencies charged with managing our resources.
    A series of events in the 1980's laid the groundwork for our 
subsequent success in energy development. In 1980, the Tribal Council 
established an in-house Energy Department, which spent several years 
gathering historical information about our energy resources and lease 
records. In 1982, following the Supreme Court's decision in Merrion v. 
Jicarilla Apache Tribe, the Tribal Council enacted a severance tax, 
which has produced more than $500 million in revenue over the last 
three decades. After Congress passed the Indian Mineral Development Act 
of 1982, we carefully negotiated mineral development agreements with 
oil and gas companies involving unleased lands and insisted upon 
flexible provisions that vested our tribe with business options and 
greater involvement in resource development.
    In 1992, we started our own gas operating company, Red Willow 
Production Company, which was initially capitalized through a 
secretarially-approved plan for use of $8 million of tribal trust funds 
received by our tribe in settlement of reserved water right claims. 
Through conservative acquisition of on-Reservation leasehold interests, 
we began operating our own wells and received working interest income 
as well as royalty and severance tax revenue. In 1994, we participated 
with a partner to purchase one of the main pipeline gathering companies 
on the Reservation. Today, our tribe is the majority owner of Red Cedar 
Gathering Company, which provides gathering and treating services 
throughout the Reservation. Ownership of Red Cedar Gathering Company 
allowed us to put the infrastructure in place to develop and market 
coalbed methane gas from Reservation lands and gave us an additional 
source of revenue. Our tribal leaders recognized that the peak level of 
on-Reservation gas development would be reached in approximately 2005, 
and, in order to continue our economic growth, we expanded operations 
off the Reservation.
    As a result of these decisions and developments, today, the 
Southern Ute Indian Tribe, through its subsidiary energy companies, 
conducts sizeable oil and gas activities in approximately 10 states and 
in the Gulf of Mexico. We are the largest employer in the Four Corners 
Region, and there is no question that energy resource development has 
put the tribe, our members, and the surrounding community on stable 
economic footing. These energy-related economic successes have resulted 
in a higher standard of living for our tribal members. Our members have 
jobs. Our educational programs provide meaningful opportunities at all 
levels. Our elders have stable retirement benefits. We have exceeded 
many of our financial goals, and we are well on the way to providing 
our children and their children the potential to maintain our tribe and 
its lands in perpetuity.
    Along the way, we have encountered and overcome numerous obstacles, 
some of which are institutional in nature. We have also collaborated 
with Congress over the decades in an effort to make the path easier for 
other tribes to take full advantage of the economic promise afforded by 
tribal energy resources. As we have stated repeatedly to anyone who 
will listen to us, ``We are the best protectors of our own resources 
and the best stewards of our own destiny; provided that we have the 
tools to use what is ours.'' We believe S. 2132 will help us do just 
that and that's why we strongly urge its passage.
III. Indian Energy Legislation in Previous Congresses
    Before commenting on S. 2132, it is important to take a step back 
and re-visit the underlying reasons that led to introduction of S. 3752 
in the 111th Congress, S. 1684 in the 112th Congress and now S. 2132 in 
the 113th Congress. Second, we believe it is also important to review 
the factors leading to and the potential significance of Tribal Energy 
Resource Agreements (``TERAs'') as an optional vehicle of tribal self-
determination. Third, we hope to show why suggested changes to Title V 
of the Energy Policy Act of 2005 are improvements that deserve this 
Committee's favorable action.
    For decades our leaders have had the privilege of working with this 
Committee and its staff. Even when differences on other political 
issues have divided Congress, this Committee has consistently worked in 
a non-partisan manner and led the way in focusing on the needs of 
Indian Country and in attempting to craft solutions to those problems. 
We respectfully urge you to do so once again in passing S. 2132.
    Because the process leading to S. 2132 has spanned considerable 
time and has included the introduction of different legislative 
measures addressing several of the same concerns, we believe it is 
worthwhile to review those two measures.
    Investigative hearings before this Committee leading to 
introduction of S. 3752 addressed a number of critical problems that 
continue to exist today in Indian Country. First, the unacceptable, 
bureaucracy-driven delays in federal approval of Indian mineral leases 
and drilling permits captured the attention of former Chairman Dorgan., 
His constituents on the Fort Berthold Indian Reservation watched their 
non-Indian neighbors get rich from mineral resource development, as 
their Indian lands remained unleased and undrilled month after month 
while awaiting federal approval and permitting.
    The punitive effect of those delays on the poorest individuals and 
communities in the U.S. clearly impressed this Committee as 
unjustifiable. A number of the provisions of S. 3752 attempted to 
reduce such administrative burdens through such measures as: mandated 
interagency coordination of planning and decisionmaking; regulatory 
waiver provisions; relief from land transaction appraisal requirements; 
and the elimination of fees assessed by Bureau of Land Management for 
applications for permits to drill on Indian lands.
    Other testimony received by this Committee prior to the 
introduction of S. 3752 reflected frustration regarding barriers to 
capital, technical expertise and facilities needed for tribes to 
proceed with alternative or renewable energy development. Again, the 
Committee attempted to address these concerns through a number of 
provisions including authorization for greater federal technical 
assistance, reclassification of certain tribal agricultural management 
practices as sustainable management practices under federal laws, 
treating Indian tribes like State and municipal governments for 
preferential consideration of permits and licenses under the Federal 
Power Act's hydroelectric provisions, expansion of the Indian Energy 
Loan Guaranty Program, and authorization for a tribal biomass 
demonstration project.
    In response to other evidence demonstrating inadequate access of 
many Indian communities to energy services and weatherization 
assistance, S. 3752 authorized the Secretary of Energy to establish at 
least 10 distributed energy demonstration projects to increase the 
availability of energy resources to Indian homes and community 
buildings. To carry out these projects, Indian Self-Determination and 
Education Assistance Act contracts and funding provisions were proposed 
for energy efficiency activities associated with tribal buildings and 
facilities. Section 305 of S. 3752 reflected a major revision of the 
federal weatherization program by authorizing direct grants to Indian 
tribes for weatherization activities.
    S. 3752 also proposed significant revision of the Indian Land 
Consolidation Act to address practical problems in that act's 
administration and substantial expansion of the durational provisions 
of the non-mineral, long-term business leasing provisions of 25 U.S.C. 
 415(a).
    While this brief summary can adequately describe the myriad matters 
addressed in S. 3752, it is fair to state that it touched a wide array 
of Indian-related programs involving Indian energy issues.
    In contrast, the scope of S. 1684 was considerably more narrow than 
S. 3752. Nonetheless, S1684 contained provisions equating tribes with 
States and municipalities for hydropower permits and licensing under 
the Federal Power Act [Sec. 201]. It also made provision for biomass 
tribal demonstration projects [Sec. 202] and would have provided 
considerably more modest, indirect access to weatherization program 
funding [Sec. 203] for Indian communities. It encouraged tribal energy 
resource development planning in coordination with the Department of 
Energy [Sec. 101]. That bill did not, however, address a number of 
matters contained in S. 3752, such as expansion of the Indian Energy 
Loan Guaranty Program, establishment of distributed energy 
demonstration projects, revision of the Indian Land Consolidation Act 
provisions, or expansion of the durational provisions of the non-
mineral, long-term business leasing provisions of 25 U.S.C.  415(a).
    S. 2132 revives the concepts set forth in S. 1684 as that earlier 
bill was referred to the full Senate by this Committee but does not 
tackle the full scope of reforms that S. 3752 sought. The differences 
between the much earlier S. 3752 and the much more modest recent 
proposals reflect both fiscal realities associated with cost as well as 
the need to ensure this Committee maintains jurisdiction over this 
important legislation.
    Perhaps the most significant element in S. 2132 and S. 1684 is the 
series of amendments to the TERA provisions initially established in 
the Title V of the Energy Policy Act of 2005. For reasons discussed in 
more detail below, those changes merit the Committee's support.
    We urge those members of this Committee who sponsored S. 3752, 
which our Tribe fully supported, not to abandon S. 2132 because of its 
narrower scope because the legislation before you is badly needed in 
Indian Country.
IV. TERAs and the Balancing of Tribal Self-Determination and 
        Secretarial Review
    On August 8, 2005, the Energy Policy Act of 2005 became law. Title 
V of this 15-title statute is the ``Indian Tribal Energy Development 
and Self-Determination Act of 2005,'' which provided comprehensive 
amendments to Title XXVI of the Energy Policy Act of 1992. One of the 
key provisions of Title V was Section 2604 [25 U.S.C.  3504], which 
created a mechanism pursuant to which Indian tribes, in their 
discretion, could be authorized to grant energy-related leases, enter 
into energy-related business agreements, and issue rights-of-way for 
pipelines and electric transmission facilities without the prior, 
specific approval by the Secretary of the Interior.. As a pre-condition 
to such authorization, a tribe and the Secretary of the Interior are 
first required to enter into a Tribal Energy Resource Agreement 
(TERA)--a master agreement of sorts--addressing the manner in which 
such a tribe would process such energy-related agreements or 
instruments.
    Although the TERA concept did not become law until 2005, its 
genesis before this Committee occurred several years earlier, and our 
files show that our former Chairman Howard Richards, Sr. formally 
requested support for similar legislation in 2003. Earlier 
correspondence confirms that we had the same concerns about federal 
delays and trust administration then that we have now. A memorandum 
from our legal counsel to the Committee's legal counsel dated June 30, 
2002 states:

         The problems with Secretarial approval of tribal business 
        activities include an absence of available expertise within the 
        agency to be helpful . . . . Some structural alternative is 
        needed. The alternative should be an optional mechanism that 
        allows tribes to elect to escape the bureaucracy for mineral 
        development purposes, provided the Secretary has a reasonable 
        indication that an electing tribe will act prudently once cut 
        free.

    Much like the debate that surrounded passage of the Indian Mineral 
Development Act of 1982, the potential diminishment of the Secretary's 
role contemplated under a TERA caused considerable discussion before 
this Committee and in Indian Country. We participated in those debates. 
Ultimately, with the encouragement of the National Congress of American 
Indians and the Council of Energy Resource Tribes, compromise was 
reached among this Nation's leaders on energy and Indian issues. 
Senator Bingaman and Senator Domenici and Senator Inouye and Senator 
Campbell reached agreements on a number of matters that paved the way 
for passage of this legislation in both houses of Congress. These 
legislative resolutions were reached only because of the overriding 
recognition that the federally-dominated system of Indian trust 
administration was broken and was condemning Indian people to an 
arbitrarily imposed future of impoverishment and hopelessness
    Despite the potential promise extended by Section 2604, no tribe 
has yet entered into a TERA. We have spent considerable time asking 
ourselves why. Clearly, the inadequacies of federal trust supervision 
persist and show no signs of marked improvement. Given the years that 
we have invested in pushing for the TERA alternative, it is worth 
identifying some of the reasons why no tribe has entered into a TERA. 
The following is a list of some of the reasons we have considered:

        1. The regulations implementing Section 2604 diminished the 
        scope of authority to be obtained by a TERA tribe by preserving 
        to the Federal Government its prerogative in carrying out an 
        array of functions--called ``inherent federal functions'' in 
        the vernacular--an undefined term that potentially rendered the 
        act's goal of fostering tribal decisionmaking and self-
        determination practically meaningless.

        2. Unlike contracts carried out by Indian tribes under the 
        Indian Self-Determination and Education Assistance Act, Section 
        2604 provided no funding to Indian tribes even though TERA-
        contracting tribes would be assuming duties and 
        responsibilities typically carried out by the United States.

        3. One of the statutory conditions for a TERA, the 
        establishment of tribal environmental review processes 
        requiring public comment, participation, and appellate rights 
        with respect to specific tribal energy projects, was an 
        unacceptable opening of tribal decisions to outside input and 
        potential criticism.

        4. Many Indian tribes lacked the internal capacity to perform 
        the oversight functions potentially contemplated in a TERA or 
        standards for measuring tribal capacity were vague or unclear.

        5. The extensive process of applying for and obtaining a TERA 
        was simply too consuming and distracting to merit disruption of 
        ongoing tribal governmental challenges.

    Clearly, this list is not exhaustive. The lesson for this 
Committee, therefore, is that the tragic consequence of no approved 
TERAs and a continued reliance upon federal supervision has been the 
incredible lost opportunities to develop Indian energy resources during 
the period between 2005 and today. Those development opportunities were 
extended to non-Indian mineral owners on State and private lands in 
other regions of the country, where no federal approval was required 
for leasing or development.
    For example, when one considers that the price of natural gas in 
2008 exceeded $10 per mcf, and today is only one third of that price, 
those lost opportunities may not return for decades. In February 2009, 
we sent a letter to the Regional Director of the BIA and explained the 
impacts being caused by bureaucratic delays at that time:

         The Tribe's Energy Department recently completed a review of 
        delays in processing pipeline rights-of-way (ROWs) and BIA 
        concurrences for the BLM to issue permits to drill wells on 
        tribal oil and gas leases. The results of that review are 
        staggering. Currently, approximately 24 Applications for Permit 
        to Drill (APDs) await BIA concurrence. Additionally, 
        approximately 81 pipeline ROWs await issuance by the BIA. Of 
        the 81 pending ROWs, 11 were approved in Tribal Council 
        resolutions adopted in 2006, 44 were approved in Tribal Council 
        resolutions adopted in 2007, 22 were approved in Tribal Council 
        resolutions adopted in 2008, and 4 were approved in Tribal 
        Council resolutions adopted in 2009. It should be emphasized 
        that in each instance these pending transactions have already 
        undergone environmental reviews by the Tribe's Natural Resource 
        Department pursuant to the Tribe's 638 contract with the BIA as 
        well as review by the Tribe's Energy Department.

         Had these APDs and ROWs been approved, the Tribe would have 
        received revenue in a number of different ways, including: (i) 
        surface damage compensation; (ii) grant-of-permission fees; 
        (iii) severance taxes; (iv) royalties; (v) Red Willow 
        Production Company working interest income; and (vi) Red Cedar 
        Gathering Company gathering and treating fees. We estimate that 
        lost revenue attributable to severance taxes and royalties 
        alone exceeds $94,813,739. Significantly, during the period of 
        delay, prices for natural gas rose to an historic high, but 
        have now declined to approximately one-third of that market 
        value. Thus, much of this money will never be recovered by the 
        Tribe.

         One example of these delays involves the Samson South Ignacio 
        Pipeline Project, which was introduced to the Tribe and the BIA 
        in June of 2006. It is our understanding that Samson has 
        complied with all BIA requirements, yet BIA continues to resist 
        issuance of the ROWs. We estimate that the Tribe is losing 
        royalties on this project at the rate of approximately $300,000 
        per month.

    Our Tribe continues to believe that TERAs provide great potential 
as a vehicle for tribal self-determination and development. We remain 
extremely frustrated with the federal administrative impediments to 
making simple decisions, such as granting rights-of-way across our 
lands. The federal system on our reservation is getting worse, not 
better, and, increasingly, we are spending more time fighting with the 
Bureau of Indian Affairs (BIA) about nonsensical directives and 
conditions for obtaining federal approvals. This is true even though we 
are considered one of the most commercially advanced tribes in the 
country, with operations in multiple states related to energy 
exploration and production, commercial real estate acquisition, real 
estate development, midstream gathering and treating, and private 
equity investment.
V. TERA Provisions of S. 2132
    The major proposed revisions to current law affecting TERAs are 
found in Section 103 of S. 2132. The proposed changes are technical in 
many cases and cannot be easily understood without a side-by-side 
comparison of the existing law. We fully support the changes, however, 
and hope that the Committee considers them favorably. Some key changes 
proposed in S. 2132 include the following.
    First, Section 103 expands the scope of TERAs to include leases and 
business agreements related to facilities that produce electricity from 
renewable energy resources.
    Second, clarifying amendments also confirm that TERAs may extend to 
pooling and communitization agreements affecting Indian energy 
minerals.
    Third, Section 103 expands existing law related to direct 
development of tribal mineral resources when no third party is 
involved. Under existing law, because no federal approval for such 
activity is required, a tribe may lawfully engage in such activity, but 
few tribes have the capacity or internal expertise to do so directly. 
The expansion contemplated by Section 103 extends such an approval 
exemption to leases, business agreements and rights-of-way granted by a 
tribe to a tribal energy development organization in which the tribe 
maintains a controlling interest. This provision expands the 
opportunity for access to capital for direct tribal development without 
federal approval where the tribe continues to control the activity.
    Fourth, Section 103 would make a proposed TERA effective after 271 
days following submittal unless disapproved by the Secretary and would 
shorten the time-period for review of TERA amendments.
    Fifth, Section 103 provides for a favorable tribal capacity 
determination based on a tribe's performance of Indian Self-
Determination and Education Assistance Act contracts or Tribal Self 
Governance Act compacts over a three year period without material audit 
exceptions.
    Sixth, Section 103 allows for TERA funding transfers to be 
negotiated between the Secretary and the tribe based on cost savings 
occasioned by the Secretary as a result of a TERA.
    Seventh, Section 103 confirms that TERA provisions are not intended 
to waive tribal sovereign immunity.
    While Section 103 includes other clarifying provisions, these 
constitute the major changes to TERA requirements found in Section 2604 
of existing law. The changes improve the scope and clarity of current 
statutory provisions.
VI. Other Important Provisions of S. 2132
    In addition to the critical changes to existing law regarding TERAs 
to be made by S. 2132, the legislation also includes much-needed 
changes to the appraisal requirements for projects proposed on tribal 
trust lands. Section 204 would amend the Energy Policy Act of 2005 by 
making clear that, for such projects where approval by the Secretary of 
the Interior is required--which is most, if not all of them, the Tribe 
or a third-party contractor hired by the Tribe can conduct the required 
appraisal. Furthermore, S 2132 would require Secretarial review and 
approval of the appraisal within 45 days, unless specific disapproval 
criteria are met. That section would also require that the Secretary 
provide the Tribe with written notice of any such disapproval and such 
notice must explain how any deficiencies in the appraisal can be cured 
or the specific reasons why the appraisal was not approved.
    If enacted, this section would eliminate the timely and often 
costly delays associated with completing fair market value appraisals 
for projects on tribal trust lands. Given the unique status and nature 
of these lands, determining such values is always difficult and 
sometimes impossible; however, under existing law, the Secretary must 
have an appraisal in order to ensure that the proposed transaction 
would benefit the Tribe.
    The fact is that the Southern Ute Indian Tribe long ago surpassed 
the capabilities of the Department of the Interior to advise the Tribe 
regarding its business decisions and often seeks waivers of the 
appraisal requirement for various tribal projects. Passage of S. 2132 
would ensure that the Tribe has the necessary flexibility to do its own 
appraisals and require that the Secretary approve those appraisals in a 
timely fashion, which would significantly reduce the risk of delays and 
the threats such delays pose to the Tribe's business interests.
VII. Conclusion
    Individually and on behalf of the Southern Ute Indian Tribe, I hope 
that these comments have been instructive as to why we strongly support 
S. 2132, and respectfully request that you move expeditiously on this 
legislation on behalf of Indian Country

    The Chairman. Thanks, Mike.
    First of all, I appreciate your testimony. I think the 
Southern Utes' experiences in oil and gas development are 
exemplary. We appreciate that because it shows what can happen 
when tribes take the lead on their own resources.
    Let's say S. 2132 is enacted with proposed TERA amendments, 
what would the TERA look like for the Southern Ute and, from 
your perspective, what roles would the Southern Ute take over 
and what roles would the Department retain?
    Mr. Olguin. If the legislation was passed, it definitely 
would streamline the process for tribes across the Nation to be 
able to really decide for themselves what is in their best 
interest for their respective tribes to develop their energy 
resources. It is really getting the Federal Government out of 
the way, I think is the bottom line, and give the tribes the 
authority to manage their own affairs particularly when tribes 
have reached the ability to well exceed the Federal Government.
    I heard earlier about the trust. It is not necessarily the 
government needs to trust the tribes; the tribes need to be 
able to trust the government that they will fulfill their 
obligations. If we look at what is going to be the government 
responsibility, it is going to be to assist the tribes, help 
those tribes that do need that assistance because not all 
tribes are the same. Every tribe is different, every tribe's 
capacity is different, every tribe's ability to manage their 
affairs is different, particularly from a financial standpoint. 
The Federal Government may be needed in areas where tribes need 
that capacity.
    The Chairman. It has been several decades ago there was oil 
and gas development on the Ft. Peck Reservation and some salt 
brine water was reinjected into the ground, got into an aquifer 
and ruined an aquifer and ruined the drinking water.
    I don't know that anyone did anything wrong in this 
particular case, but it does show a problem of oversight. I 
will tell you my concern which is somebody has to have the 
oversight of what is going on. I would like you guys to have it 
because I think it helps with your self-determination.
    Give me your perspective on if there would be gaps that I 
should be concerned about or if I shouldn't be concerned about 
potential gaps in oversight.
    Mr. Olguin. From our perspective, I am not sure if there 
would be a gap, particularly from Southern Ute's perspective. I 
can only speak to that.
    We require a lot criteria and requirements that are 
probably more stringent than the Federal Government. When you 
look at these situations where we have well bores not sealed 
properly, that may mean some oversight by the Federal 
Government but in our case, we exceed that.
    The Chairman. Okay. That's good.
    Carole, once again I appreciate you being here. Thank you 
for your leadership when it comes to CSKT in particular.
    Your testimony supports inclusion of biomass in S. 2132. 
Can you explain how the biomass provisions could help the tribe 
in its biomass energy facility project, because I know you have 
one?
    Ms. Lankford. Currently, we are working on feasibility. We 
don't have biomass.
    The Chairman. How would this help you as you plan?
    Ms. Lankford. Currently, we have a lot of timber products, 
a lot of timber sales and things like that but there is always 
a lot of salvage and things like that which lays on the ground 
and goes to waste. We also have adjacent to us the U.S. Forest 
Service. The potential of utilizing some of the slash and 
things they have would also help operate the biomass facility.
    The Chairman. Vice Chairman Barrasso.
    Senator Barrasso. Chairman Finley, Assistant Secretary 
Washburn's testimony contends that the Federal liability 
provisions for the Tribal Energy Resource Agreements in my bill 
and also the Energy Policy Act of 2005 are unclear. He is 
recommending replacing those provisions with a broader waiver 
of liability that is in the HEARTH Act. What do you think about 
his recommendation?
    Mr. Finley. I would say that I don't support it. As you 
stated, they are a lot broader than they really need to be. 
Within the present language in this bill, those are under 
negotiated terms between the third party and the tribe. That is 
a lot narrower.
    Senator Barrasso. Your testimony also noted that your tribe 
is interested in using biomass to promote on-reservation 
economic development. My bill would create demonstration 
projects to give tribes access to reliable supplies of biomass 
material from Federal land. What kind of economic impact would 
this demonstration project have for your tribe and other 
participating tribes?
    Mr. Finley. I think you would have a great deal of positive 
impact. We have done a lot of the studies. I think we are ahead 
of my counterpart to my right on whether or not we want to do a 
Woody Biomass Project on the Colville Reservation because of 
the price tag. We have a lot of other needs at the front of the 
line. Whether or not we can get to that in a timely manner is 
another story.
    However, the ability to manage those forests with the same 
model that we have not only creates jobs, it is going to allow 
us the opportunity to sell those to third parties, but allow us 
to create a buffer zone for wild fires that are epidemic in my 
area at certain times of the year, especially this year being a 
dry year.
    Other than the benefits of the biomass plant itself that 
has all these other ancillary benefits that are almost 
immeasurable in terms of jobs and safety.
    Senator Barrasso. Thank you very much, Mr. Finley.
    Chairman Olguin, the Assistant Secretary's testimony 
suggested giving the Federal Government a broader exemption 
from liability for tribal energy development. He recommended 
using the waiver of liability in the HEARTH Act for tribal 
energy resource agreements. What do you think of that 
recommendation?
    Mr. Olguin. A waiver of liability, not being able to read 
his testimony--according to what I have been advised, we are 
supportive either way but I believe we would like to respond to 
it in writing as again, we have not read his testimony.
    Senator Barrasso. Okay. He contends that the 120-day time 
period for making the capacity determinations for Tribal Energy 
Resource Agreements is not enough. He recommends this time 
period begin running after a public comment period on the 
agreement ends or after a final agreement is submitted.
    Do you think this is an appropriate length of time to have 
to wait for the capacity determinations?
    Mr. Olguin. I believe when we look at making these 
determinations, again we have to look at what is the delay. I 
think we need to understand why more time is needed 
particularly when a tribe can demonstrate tomorrow that it has 
the capability of doing so. Again, I think we need to look at 
the details of what he is talking about to really understand 
why he needs a further delay.
    Senator Barrasso. Thank you.
    The Chairman. Senator Heitkamp?
    Senator Heitkamp. I have just a couple quick questions 
about building on capacity.
    Mike, your earlier testimony today when we heard concerns 
and issues and looking at what is happening in places like 
North Dakota where we have a huge development on the Mandan, 
Hidatsa and Arikara Nation and the potential development down 
in Standing Rock. I would note that the Chairman of Standing 
Rock Sioux Nation is here with his beautiful wife, Dave 
Archimbold and Nicole.
    I think everyone wants to get out of the business of being 
paternalistic. I thought some of the answers Mr. Washburn gave 
about the distinction between tribal lands and Federal lands 
less than satisfying. I think what we want to do is build out 
that capacity of self-determination and provide an avenue for 
predictability for tribal governments to determine the welfare 
or development of their resources for the welfare of the people 
that those resources exist.
    You obviously have an excellent reputation among the oil 
and gas producing counties. What can the tribes do working 
among themselves to build up that capacity and maybe create a 
broad standard that could then be used to argue with the 
Department of Interior that you are ready?
    Mr. Olguin. There have been efforts in the four corners 
area to bring four corners tribes together who are energy 
producing and prompt these questions to come up with some 
answers. What is it going to take from a capacity standpoint?
    A lot boils down to hiring the right people, the experts. 
Will the tribes have that ability? Some may, some may not but 
is there an opportunity to share some of that expertise across 
the board or at least from the standpoint of what are the 
qualifications needed for some of these positions.
    We realize when you look at the Federal capacity, as I said 
this morning, institutional knowledge is being lost in the 
Federal system so who better to gain that dealing with tribes 
seeking education, getting the professionals and actually 
exceeding the Federal capacity. I think it is working together 
amongst ourselves as tribes to better our lives.
    Senator Heitkamp. Kind of the point I am getting at is 
there is a lot of collective knowledge among the tribes that 
can be shared, a lot of technical expertise that can be shared 
and really build out that knowledge capacity that will lead to 
greater self-determination.
    I want to congratulate you and your tribe for providing 
that assistance and encourage you to continue to work in a 
leadership capacity to work with all the oil and gas producing 
tribes and coal producing tribes to reach that point at which 
these minerals which are part of your treaty rights can be 
determined, the use of those minerals and oil and gas can be 
determined by the people that own those minerals and that is 
the tribal entities themselves.
    Mr. Olguin. Thank you.
    The Chairman. Thank you, Senator Heitkamp.
    Again, I want to thank today's tribal witnesses for 
traveling. Some have traveled far to get here to discuss energy 
development and this bill, S. 2132.
    Aletha, you got off easy but I will tell you I appreciate 
the work your tribe has done in solar development. It is 
exemplary, it is great and I think it speaks well to what you 
are trying to do for your tribe in Nevada.
    This hearing is going to remain open for two weeks from 
today for anyone wishing to submit comments on S. 2132.
    Once again, I want to thank my Vice Chair, Senator 
Barrasso, for his leadership on this issue.
    With that, the hearing is adjourned.
    [Whereupon, at 3:55 p.m., the Committee was adjourned.]
                            A P P E N D I X

Prepared Statement of Tex ``Red Tipped Arrow'' Hall, Chairman, Mandan, 
                       Hidatsa and Arikara Nation
    Chairman Tester, Vice Chairman Barrasso and Members of the 
Committee. My name is Tex Hall. I am the Chairman of the Mandan, 
Hidatsa and Arikara Nation (MHA Nation). I am honored to present this 
testimony.
Introduction
    The MHA Nation and our Fort Berthold Reservation sit in the middle 
of the most active oil and gas development in the United States. With 
about 1200 new oil and gas wells producing 300,000 barrels a day, the 
MHA Nation, located in west-central North Dakota, is the equivalent of 
the 7th highest producing oil and gas state in the Country. In this 
environment we need the full support of the Committee and we need it 
now.
    While the MHA Nation appreciates how quickly the Committee has 
acted on S. 2132, additional provisions are needed to make a difference 
in Indian energy development and should be included in the bill as it 
is brought to the Senate floor. Attached to my testimony is one of the 
most important amendments needed--creation of a new Indian Energy 
Coordination Office to streamline and improve energy permitting on 
Indian lands. We do not need more study or discussion of the issues, we 
need legislation that will reform how the Federal Government oversees 
Indian energy development and works with tribes.
    The MHA Nation is already working on the front lines and needs your 
support. We work every day to promote responsible development of our 
energy resources and provide for our communities, including:

   working directly with energy companies to develop our 
        resources;

   passing and enforcing laws to govern energy activities and 
        protect our human, natural and cultural resources;

   maintaining and improving our Reservation infrastructure; 
        and,

   thinking creatively to maximize the value of our resources 
        and return that value to our members and our Reservation.

    The MHA Nation is forging a new era of self-determination. We are 
no longer merely implementing limited Federal programs nor are we 
sitting back waiting for the Federal government to regulate in these 
areas. The MHA Nation is a sovereign government and we must oversee and 
regulate the tremendous energy development occurring on our Fort 
Berthold Reservation. In this new era of self-determination, the MHA 
Nation exercises its own authority, enforces our own laws and delegated 
federal authority, and develops and manages our own programs.
    The MHA Nation asks that this Committee and Congress take action to 
support our work in two ways. First, by restructuring how federal 
agencies work to oversee and approve energy development on Indian 
reservation. Second, by ensuring that Indian tribes are able to 
exercise full authority over energy development on our lands. These 
amendments to S. 2132 are described in more detail below and in the 
attached legislative proposal. These amendments should be included as 
the bill is brought to the Senate floor.
Legislative History
    The Committee already has an extensive record and much agreement on 
the obstacles to Indian energy development. More study and discussions 
are not needed. Over the last 6 years, the Committee has investigated 
the issues, held roundtables, numerous hearings and considered 
legislation. The MHA Nation has been an active participant in this 
process.
    In the 110th and 111th Congresses, the MHA Nation presented 
testimony at two Indian energy hearings held by former Senator Dorgan. 
Senator Dorgan eventually introduced the ``Indian Energy Parity Act of 
2010'' which included a number of proposals supported by the MHA 
Nation. Senator Dorgan also drafted an ``Indian Energy Tax Act.'' These 
important tax provisions are needed to help make energy development 
possible on Indian lands.
    In the 112th Congress, the MHA Nation participated in a May 2011 
Committee listening session on a draft bill entitled the ``Indian 
Tribal Energy Development and Self-Determination Act Amendments of 
2011.'' At that listening session Committee staff requested that tribes 
submit proposals to overcome barriers to Indian energy development. In 
response, on July 18, 2011, the MHA Nation submitted 31 legislative 
proposals to the Committee.
    This draft bill was eventually introduced as S. 1684 and the 
Committee held a hearing on the bill on April 19, 2012. I testified at 
that hearing and included the MHA Nation's 31 legislative proposals in 
my testimony so that they would be a part of the Committee hearing 
record. I ask that the Committee incorporate my prior testimony into 
today's testimony by reference.
    On the House side, the MHA Nation also testified before the 
Subcommittee on Indian and Alaska Native Affairs on April 1, 2011 
during an Indian Energy Oversight Hearing, in February 15, 2012, on 
Chairman Young's ``Native American Energy Act,'' H.R. 3973, on April 
19, 2012 on the Bureau of Land Management's (BLM) proposed regulation 
of hydraulic fracturing activities, and on May 10, 2013 on the current 
version, H.R. 1548, of Chairman Young's Indian energy bill.
Need for Congressional Action
    Now is the time to act. The MHA Nation and number of other Indian 
tribes are already working to develop and manage our energy resources 
to provide long-term economic security for our communities, increase 
tribal self-determination, while also providing additional domestic 
energy resources. Without Congressional action, tribes will miss out on 
energy development opportunities, or, when development does occur, 
tribes will be unable to keep the benefits of development on the 
reservation. Congress should pass legislation that restructures the 
current process used by federal agencies and provides support for the 
exercise of tribal authority over energy development.
    The MHA Nation is working on the front lines of energy development 
and Congressional and federal agency support for this work is critical 
to our success. The Bakken Formation underlying our Reservation is the 
largest continuous oil deposit in the lower 48 states. In a few short 
years, our region has become the second highest oil and gas producing 
area in the United States. We produce more oil than Alaska. Only Texas 
produces more. Currently, on our Reservation there are 30 drilling 
rigs, more than 27,000 semi-trucks, and about 1,200 oil and gas wells 
producing in excess of 300,000 barrels of oil per day.
    We are also constructing the first oil refinery to be built in the 
United States since 1976. Our Clean Fuels Refinery Project is now under 
construction and we expect to begin operations in 2015. Our refinery 
will provide the MHA Nation with ``value added'' benefits for the oil 
produced on our Reservation, including a higher return on our oil 
resources, jobs and economic opportunity as well as additional domestic 
energy production. While we appreciate effort of the Bureau of Indian 
Affairs (BIA) and the Environmental Protection Agency (EPA) to keep 
this project moving through the approval process, it took us a decade 
before the refinery was finally approved. With the level of activity on 
our Reservation, we cannot wait a decade or even a year for approval of 
permits.
    To improve this situation we need to be working on two fronts. 
Congress should restructure how federal agencies oversee and approve 
energy development on tribal lands while also ensuring that tribes have 
full authority to manage and regulate energy development on our lands. 
The need for greater tribal authority over permitting and regulatory 
functions is easy to see by simply looking at federal staffing levels. 
While these federal agencies must be fully staffed to meet the Federal 
Government's trust responsibilities, we also cannot wait for the 
Federal Government to act and have no choice but to take matters into 
our own hands. The MHA Nation has been doing all we can to fill the 
regulatory and staffing void while promoting development of our energy 
resources.
    For example, the MHA Nation enacted forward thinking regulations to 
address widespread and wasteful flaring of natural gas. Regulation was 
needed to protect our clean air and to promote responsible development 
of our tribal energy resources. However, we did not address this issue 
by simply imposing new requirements that make it more difficult to 
produce energy. Instead, we enacted a regulation that encourages our 
industry partners to put their gas resources to beneficial use.
    One of the reasons we enacted regulations for gas flaring was 
because the Bureau of Land Management (BLM) lacks the staff to 
adequately enforce its ``Notice to Lessees and Operators of Onshore 
federal and Indian Oil and Gas Leases: Royalty or Compensation for Oil 
and Gas Lost'' which covers the flaring of gas. With the majority of 
the wells on the Reservation being flared and our trust resources going 
to waste, the MHA Nation was forced to step up and assert our tribal 
authority.
    Indeed, there is no better manager and regulator of our homelands 
than the tribal government elected to serve the MHA Nation and our Fort 
Berthold Reservation. In another example, our Tribal Council passed the 
``Missouri River, Badlands and Sacred Sites Protection Act'' to provide 
for the protection of sensitive natural resources on our Reservation 
while allowing for responsible energy development. The requirements of 
this Act even far exceed requirements in the neighboring State of North 
Dakota.
    As a part of this Act, to protect the Missouri River, we require a 
half-mile setback from the River for oil and gas wells on our lands. 
Meanwhile, across the River, the State only requires a 500-foot 
setback. We wish the State had followed our lead. Currently there is 
pollution of the River and our waters as well pads and oil and gas 
operations on State lands are washed over by the spring thaw. In 
addition, in the Badlands portion of our Reservation we require a 
minimum of 8 wells per multi-pad. Requiring that oil and gas operators 
combine many wells onto a single multi-pad reduces the number of well 
pads and roads that are constructed in the sensitive Badlands area.
    The MHA Nation has also enacted an Environmental Spill Code 
including fines and penalties for intentional dumping of hazardous 
materials. These are just a few examples of the authority the MHA 
Nation is exercising to promote responsible development of our energy 
resources. We still have a long way to go and we need the support of 
Congress and federal agencies in this effort.
    As we work on the front lines and enter a new era of self-
determination, we ask that this Committee and the full Congress support 
our efforts in two ways. First, by restructuring how federal agencies 
work to oversee and approve energy development on Indian reservation. 
Second, by ensuring that Indian tribes are able to exercise full 
authority over energy development on our lands. We have developed 
proposals in both of these areas and explain them in more detail below 
as well as in the attached legislative proposal.
Proposal for Indian Energy Coordination Office
    First, in order to develop federal expertise in the area of Indian 
energy and to provide leadership as well as a model for efficient 
permit processing, MHA Nation asks that Congress direct Interior and 
all the other federal agencies involved in overseeing Indian energy 
development to establish a high-level Indian Energy Coordination Office 
in Denver, Colorado. The office would use existing resources to finally 
provide the staff and expertise that Indian energy deserves.
    We are already working with the Administration to create this 
office, but legislation is needed to combine federal agency authorities 
and restructure energy permitting on Indian lands. I have attached a 
legislative proposal to my testimony. The MHA Nation asks that this 
proposal be included in S. 2132 as it is brought to the Senate floor.
    This new office should be located in the Interior Deputy 
Secretary's Office and be led by a Director who has all the authority 
necessary to issue permits and approve energy development on Indian 
lands--everything from permitting oil and gas wells to environmental 
review of proposed projects. Staff with energy expertise would ensure 
that permits and other approvals keep moving and do not get hung up by 
a lack of understanding or experience. The office would also enter into 
Memorandum of Understanding with EPA, the Army Corps of Engineers, and 
the United States Department of Agriculture to provide staff and 
further ensure permit streamlining and coordination. The staff of this 
office would also provide technical assistance to local BIA Agencies 
and tribes doing work on the ground.
    This office should be guided by basic principles that have been 
lost in the current unorganized federal system for overseeing energy 
development on Indian lands. In particular, Indian lands are not public 
lands. While both Congress and Interior have been clear on this point 
in the past, over time, some federal agencies have attempted to apply 
public land management standards to Indian lands. Current examples 
include the application of the National Environmental Policy Act (NEPA) 
to Indian lands, and BLM's proposal to regulate hydraulic fracturing on 
Indian lands. In both cases, these agency actions exceed the underlying 
legal authority. This Office would end these practices, treat Indian 
lands according to federal trust management standards, and enter a new 
era where this Office provides technical support for tribes to regulate 
these issues ourselves.
    The Office we are proposing is long overdue. Congress already 
approved and expanded similar offices for energy development on federal 
lands. The same should be provided for Indian lands where the benefits 
would far exceed the benefits of energy development on federal lands. 
Energy development on Indian lands provides badly needed jobs, economic 
development, revenues for tribal governments, and, if managed properly, 
long-term investment in reservation infrastructure.
Legislative Proposals to Increase Tribal Authority
    In addition, to improved federal coordination, this Committee and 
Congress should support changes in the law to increase tribal authority 
over energy development. The MHA Nation and many Indian tribes are 
entering a new era of self-determination where we exercise tribal 
authority to regulate energy development on our lands. This new era 
builds upon and is the fulfillment of decades of successful federal 
policy and tribal decisionmaking under the Indian Self-Determination 
and Education Assistance Act of 1975 (Public Law 93-638). In this new 
era, the Federal Government and Indian tribes should work together on a 
government-to-government basis to determine how to best regulate 
activities on Indian lands. Then, with appropriate technical assistance 
and support from the Federal Government, tribes can exercise their own 
authority or delegated federal authority to regulate and manage 
reservation resources.
    This is exactly what is required by long-standing federal 
consultation policies. Executive Order No. 13175 on Consultation and 
Coordination with Indian Tribal Governments directs in Section 3 that 
federal agencies ``consult with tribal officials as to the need for 
Federal standards and any alternatives that would limit the scope of 
Federal standards or otherwise preserve the prerogatives and authority 
of Indian tribes.'' This Committee and Congress should support these 
efforts by recognizing and affirming tribal authority in all areas 
related to the development of Indian energy resources. Below we 
highlight some of the most important changes needed to support tribal 
authority over energy development.
    First, The most significant authority Indian tribes need to develop 
their energy resources is exclusive taxing authority over their 
reservations. Tribes already have the authority to tax, but 
encroachments on tribal authority, jurisdiction and business activities 
by state and federal governments, have disabled the ability of tribes 
to use their taxing authority to support energy and economic 
development.
    The MHA Nation and tribes everywhere, need Congress to pass laws 
affirming the exclusive authority of Indian tribes to tax energy 
development on our reservations. Currently, outdated Supreme Court 
precedent allows states to place a double tax on energy development on 
tribal lands. These state taxes eliminate or reduce our ability to 
raise our own taxes and tribes remain ever more dependent upon the 
Federal Government.
    On the MHA Nation's Fort Berthold Reservation, this double taxation 
forced the MHA Nation into an unfair oil and gas tax agreement with the 
State of North Dakota. Over the last 5 years the State took almost $500 
million in taxes from energy development on my Reservation. In 2013 
alone, the State took about $215 million.
    The negative impact on the Reservation is not so hard to figure 
out. For example, in 2011, the State collected more than $75 million in 
taxes from energy development on the Reservation, but spent less than 
$2 million of that amount on state roads on the Reservation and zero 
tax dollars on federal and tribal roads. In addition, none of the 2011 
funds were used to mitigate impacts that oil and gas development has 
had on the MHA Nation, its members and our natural resources.
    The State receives this windfall at the expense of the MHA Nation 
and tribal and federal infrastructure even though in just the past two 
years the State has collected almost $4 billion in tax revenues from 
all of the oil and gas development in the State. In fact, within a year 
or two of the tax agreement, the State's coffers were so full that the 
State created an investment account whose funds cannot be spent until 
2017. While these funds sit around earning interest, federal and tribal 
infrastructure on our Reservation is such disrepair every day is a 
state of emergency. This affects our ability to maximize oil and gas 
development, but more importantly, our residents and tribal members 
must live in this state of emergency just getting to school or the 
grocery store.
    The MHA Nation needs tax revenues to do the same work that every 
other government does. We need to maintain roads so that heavy 
equipment can reach drilling locations, but also so that our tribal 
members can safely get to school or work. We also need to provide 
increased law enforcement to protect tribal members and the growing 
population on our Reservation. We also need to develop tribal codes and 
employ tribal staff to regulate activities on the Reservation.
    The Committee should include in S. 2132 a provision to clarifies 
the law and affirms the exclusive authority of tribes to tax energy 
development on Indian lands. Or, at the very least, the Committee 
should limit the amount of tax revenues that states can take from 
development of trust resources on Indian lands. Considering that states 
use none of these dollars to benefit infrastructure on Indian lands, 
states should be limited to 10 percent or less of the tax revenues 
earned from our resources.
    Second, if not adopted as a part of the MHA Nation's Indian Energy 
Coordination Office proposal, the Committee should separately prohibit 
BLM from applying regulations developed for public lands to Indian 
lands. Indian lands are not public lands, yet BLM has been incorrectly 
using its authority under the Federal Land Policy and Management Act of 
1976 to regulate activities on Indian lands. In the most recent 
example, the BLM is developing regulations for hydraulic fracturing 
activities for public lands and intends to apply those regulations to 
Indian lands.
    BLM's proposed regulations would eliminate much of the oil and gas 
development the MHA Nation has been working so hard to establish. 
Indian lands are for the use and benefit of Indian tribes and the 
Committee should develop legislation that either precludes BLM from 
exercising authority on Indian lands, or require that BLM develop 
regulations consistent with its trust responsibility to Indian tribes 
and not public interest standards. At a minimum, the Committee should 
require BLM to allow tribes to opt out of the proposed regulations so 
that tribes may determine whether and how best to regulate hydraulic 
fracturing on their lands.
    Third, the Committee should prohibit EPA from implementing its new 
synthetic minor source rule for two years to ensure appropriate 
staffing is in place to administer any new permitting requirements. 
Energy development on the Fort Berthold Reservation is already limited 
by layers of bureaucratic federal oversight and federal agencies that 
are too short-staffed to manage existing requirements. EPA should be 
prohibited from implementing this new rule, or any new rule, until it 
can prove that it has the staff resources in place. And, again, EPA 
should also allow tribes to opt out of the proposed rule so that tribes 
may determine how best to regulate minor sources on their lands.
    Fourth, the Committee should expand the Indian Self-Determination 
and Education Assistance Act of 1975 (Public Law 93-638) to apply to 
additional agencies and bureaus. Indian tribes, not federal agencies, 
have the on the ground staff to provide oversight and monitoring of oil 
and gas development. Contracting authority under P.L. 638 should be 
expanded to BLM, EPA, and the Fish and Wildlife Service.
    Fifth, we also need to clarify tribal jurisdiction over Reservation 
activities and any rightsof- way granted by an Indian tribe. Courts 
have created uncertainty in the law and this uncertainty is yet another 
disincentive to the energy business.
    Sixth, the Committee should develop legislation to expand and 
clarify the ``Buy Indian Act,'' 25 U.S.C.  47. As a part of its 
government-to-government and trust relationship to Indian tribes, the 
Federal Government should be required to purchase tribally produced or 
owned energy resources. As an example, the MHA Nation is developing an 
oil refinery that could supply federal agencies and the Department of 
Defense with tribally produced and owned domestic energy supplies.
    Seventh, S. 2132 should address delays in payments of oil and gas 
royalties due to approval of Communitization Agreements. Under current 
law, royalties are due within 30 days of the first month of production. 
However, without any authority, the BLM has allowed royalty payments to 
be delayed for months and years pending the approval of Communitization 
Agreements. This violation of the law cannot be allowed to continue.
    Where feasible, S. 2132 should require Communitization Agreements 
to be submitted at the time an Application for Permit to Drill is 
filed. This is possible where the oil and gas resource is well known. 
When this is not feasible, BLM should require that royalty payments 
from producing wells be paid within 30 days from the first month of 
production into an interest earning escrow account.
    Eighth, S. 2132 should create a low sulfur diesel tax credit for 
tribal refineries. This credit would be in addition to the existing 
credit for small business refiners. This legislation would retain the 
1,500-employee cap and 5 cents per gallon credit, but remove the barrel 
and time limits, and provide that the credit may be sold for equity.
    Finally, S. 2132 should open the doors of the Department of 
Energy's (DOE) energy efficiency programs to Indian tribes. Despite a 
longstanding state program, there are no ongoing programs to support 
tribal energy efficiency efforts. DOE should allocate not less than 5 
percent of existing state energy efficiency funding to establish a 
grant program for Indian tribes interested in conducting energy 
efficiency activities for their lands and buildings.
    The MHA Nation has included in its legislative proposals a tribal 
energy efficiency program that is modeled after the successful Energy 
Efficiency Block Grant (EEBG) program. Despite its success, the EEBG 
program was only funded one time--under the American Reinvestment and 
Recovery Act of 2009. To ensure an ongoing source of funding for tribal 
energy efficiency efforts, tribes should be provided a portion of the 
funding for state energy efficiency efforts.
Analysis of Indian Tribal Energy Development and Self-Determination Act 
        Amendments of 2014
    In general, the MHA Nation supports S. 2132, the ``Indian Tribal 
Energy Development and Self-Determination Act Amendments of 2014.'' 
There are only a few problems with some of the provisions in S. 2132. 
The biggest problem is what is not in the bill. After 6 years of 
investigations, roundtables and hearings, S. 2132 barely scratches the 
surface of outdated laws and regulations, bureaucratic regulatory and 
permitting processes and insufficient federal staffing or expertise to 
implement those processes. While we appreciate the effort made to 
improve these areas of law, much more needs to be done.
    S. 2132 is focused on making changes to the Tribal Energy Resource 
Agreement (TERA) program that was authorized by Title V of the Energy 
Policy Act of 2005. The primary benefit of a TERA is to enable a tribe 
to enter into leases and rights-of-way without Secretarial approval. A 
TERA would allow a tribe to gain greater control over the multiple 
approvals needed for oil and gas development.
    The MHA Nation supports increasing tribal authority over energy 
development on Indian lands, but we are concerned about the effect the 
TERA program may have on the Federal Government's trust responsibility 
to Indian tribes. The trust responsibility is one way that the Federal 
Government fulfills its treaty obligations to the MHA Nation and other 
tribes. As described in my testimony above, the MHA Nation is 
interested in working with the Federal Government to increase tribal 
authority in ways that do not potentially undermine the federal trust 
responsibility.
    We appreciate S. 2132's new language that would help clarify the 
Secretary of the Interior's trust responsibility in relation to leases 
and agreements made under a TERA. However, S. 2132 should include an 
additional requirement for the Secretary to further consult with tribes 
on the effect of a TERA on the Secretary's trust responsibility. The 
Secretary should then be required to ensure that the results of this 
consultation are included in the regulations for implementing the TERA 
program. When laws like the TERA program are enacted, we should all 
fully discuss and understand any consequences for the trust 
responsibility and our treaties.
    S. 2132 includes a variety of other changes and initiatives that 
the MHA Nation supports. In some cases, we ask that the Committee 
revise these proposals to make them more likely to benefit Indian 
energy development.
    First, the MHA Nation supports a legislative directive for the 
Secretary to include tribes in well-spacing decisions. Currently, the 
BLM relies on state well spacing forums and often does not consult with 
tribes regarding this important issue. On our Reservation, the North 
Dakota Industrial Commission recently approved a well spacing plan that 
would have stranded $90 million in tribal minerals. The BLM was 
prepared to approve this plan without discussing it with the MHA 
Nation. We were lucky to learn about this decision from the BIA. Well 
spacing is to important to Indian tribes and the Federal Government's 
trust and treaty responsibilities to be left to state forums that have 
no authority on Indian lands.
    Second, we support changes in S. 2132 that would make it more 
likely that the DOE would implement its long overdue Indian Energy Loan 
Guarantee Program. However, the language in S. 2132 falls short of 
requiring the Secretary of Energy to implement this program as was 
required for DOE's other loan guarantee program, the Title XVII, Energy 
Innovations Loan Guarantee Program. DOE should be required to offer 
loan guarantees to Indian tribes. Indian energy loan guarantees are 
likely to be more successful than the Title XVII program because of the 
vast unlocked potential of Indian energy resources. As an example, 
Interior is already running a successful Indian loan guarantee program 
but it lacks the budget to fund expensive energy projects.
    Finally, the MHA Nation supports changes in S. 2132 that would 
allow tribes to apply for direct weatherization funding from DOE. 
However, S. 2132 only goes halfway to solving the problem. Allowing 
tribes to simply apply for direct funding is an important change, but 
Indian tribes need a weatherization program that is tailored to Indian 
Country.
    The MHA Nation included needed changes to DOE's weatherization 
program in its legislative proposals. In addition to direct funding, 
DOE should reduce reporting requirements for Indian tribes, use 
weatherization standards that reflect the status of housing in Indian 
Country, and provide training for energy auditors in Indian Country. 
The weatherization program is a low-income program and its funding 
should go to those that need it most--in Indian Country poverty rates 
are two and half times the national average.
    The decades old weatherization program and its management by DOE is 
an affront to the Federal Government's trust responsibility and DOE's 
own ``American Indian Tribal Government Interactions and Policy.'' 
Funding intended, in part, for the members of Indian tribes should not 
be distributed through state governments who then distribute the 
funding through state nonprofits. Regardless of whether this 
legislation is passed by Congress, DOE should immediately reform its 
weatherization program consistent with federal trust responsibilities.
Conclusion
    I want to thank Chairman Tester, Vice Chairman Barrasso, Senator 
Heitkamp and the other members of the Committee for the opportunity to 
highlight the most significant issues the MHA Nation faces as we 
promote and manage the development of our energy resources. We do not 
need more studies or discussion. Instead, the attached legislative 
proposal and other important amendments should be included in S. 2132 
as it is brought to the Senate floor. These amendments would, first, 
restructure how federal agencies work to oversee and approve energy 
development on Indian reservation and, second, ensure that Indian 
tribes are able to exercise full authority over energy development on 
our lands. The MHA Nation asks for the Committee and Congress' support 
in these two areas as we continue to advance tribal authority over 
energy development on our lands.
    Attachment
    
    
    
    
    
    
    
    
                                 ______
                                 
 Prepared Statement of Gordon Howell, Chairman, Business Committee for 
        the Ute Indian Tribe of the Uintah and Ouray Reservation
    Chairman Tester, Vice Chairman Barrasso, and Members of the 
Committee on Indian Affairs, thank you for the opportunity to testify 
on S. 2132, the ``Indian Tribal Energy Development and Self-
Determination Act Amendments of 2011.'' My name is Gordon Howell. I am 
the Chairman of the Business Committee for the Ute Indian Tribe of the 
Uintah and Ouray Reservation. The Ute Indian Tribe consists of three 
Ute Bands: the Uintah, the Whiteriver and the Uncompahgre Bands. Our 
Reservation is located in northeastern Utah.
I. Introduction
    The Ute Indian Tribe is a major oil and gas producer. Production of 
oil and gas began on the Reservation in the 1940's and has been ongoing 
for the past 70 years with significant periods of expansion. The Tribe 
leases about 400,000 acres for oil and gas development. We have about 
7,000 wells that produce 45,000 barrels of oil a day. We also produce 
about 900 million cubic feet of gas per day. And, we have plans for 
expansion. The Tribe is in process of opening up an additional 150,000 
acres to mineral leases on the Reservation with an $80 million 
investment dedicated to exploration.
    The Tribe relies on its oil and gas development as the primary 
source of funding for our tribal government and the services we 
provide. We use these revenues to govern and provide services on the 
second largest reservation in the United States. Our Reservation covers 
more than 4.5 million acres and we have 3,175 members living on the 
Reservation.
    Our tribal government provides services to our members and manages 
the Reservation through 60 tribal departments and agencies including 
land, fish and wildlife management, housing, education, emergency 
medical services, public safety, and energy and minerals management. 
The Tribe is also a major employer and engine for economic growth in 
northeastern Utah. Tribal businesses include a bowling alley, 
supermarket, gas stations, feedlot, an information technology company, 
manufacturing plant, and Ute Oil Field Water Services, LLC. Our 
governmental programs and tribal enterprises employ 450 people, 75 
percent of whom are tribal members. Each year the Tribe generates tens 
of millions of dollars in economic activity in northeastern Utah.
    The Tribe takes an active role in the development of its resources, 
however, despite our progress, the Tribe's ability to fully benefit 
from its resources is limited by the federal agencies overseeing oil 
and gas development on the Reservation. For example, we need 10 times 
as many permits to be approved. Currently, about 48 Applications for 
Permits to Drill (APD) are approved each year for oil and gas 
operations on the Reservation. We estimate that 450 APDs will be needed 
each year as we expand operations.
    As the oil and gas companies who operate on the Tribe's Reservation 
often tell the Tribe, the federal oil and gas permitting process is the 
single biggest risk factor to operations on the Reservation. In order 
for the Tribe to continue to grow and expand our economy the federal 
permitting process needs to be streamlined and improved.
    It has been 6 years since former Senator Dorgan called for reform 
of the bureaucratic permit approval process for energy projects. He 
reported that a single oil and gas well must navigate a 49-step process 
involving at least 4 understaffed federal agencies. The Tribe asks that 
the Committee finally take dramatic action to focus federal staff and 
resources on Indian energy development and provide the support tribes 
need to fully benefit from their energy resources.
    Since Senate Dorgan highlighted the issues there have been numerous 
Congressional hearings, testimony and roundtables. The Committee has 
developed an extensive record and there has also been much agreement 
about the need for change, but no new legislation has been moved out of 
Committee or passed by Congress. We have seen a few changes within the 
Administration, but much more needs to be done.
II. A New Indian Energy Regulatory Office is Needed to Improve Staffing 
        and Coordination
    Improvements in Bureau of Indian Affairs (BIA) energy staff and 
coordination are long overdue. Despite our tremendous oil and gas 
resources and the value of these resources to the Tribe and to domestic 
energy production, we have only 2 or 3 BIA staff involved in the 
oversight and processing of oil and gas permits on our Reservation. 
These BIA staff are responsible for ensuring that permits comply with a 
numerous federal laws and they must engage in extensive coordination 
with other federal staff located in remote offices.
    The Ute Tribe believes the best way to address these staffing and 
coordination issues is to establish a new Indian Energy Regulatory 
Office. This Office would be centrally located in Denver, Colorado, 
utilize and refocus existing federal resources in Denver, and serve as 
a new BIA Regional Office for energy producing tribes. To improve oil 
and gas permitting on Indian lands we need major reforms and high-level 
federal coordination. In fact, this is exactly the solution that 
Congress chose for permitting of oil and gas development on federal 
lands. Why is Congress leaving Indian lands behind?
    In 2005, Section 365 of the Energy Policy Act authorized the Bureau 
of Land Management (BLM) to initiate a ``Pilot Project to Improve 
Federal Permit Coordination.'' The law allowed BLM to establish 7 pilot 
offices and streamline federal permitting by co-locating staff from 
different federal agencies in these offices. Recently, Congress passed 
a bill to expand these pilot offices.
    We need a similar effort for Indian lands. BIA is the most 
important federal agency charged with supporting Indian energy, yet 
there are only a handful of BIA employees with energy expertise. A 
high-level regulatory office would encourage BIA to hire staff with 
energy expertise, provide technical and financial management support 
needed by tribes, and improve coordination of Indian energy permitting 
across Interior and the Federal Government.
    The Ute Tribe has developed a legislative proposal to establish an 
Indian Energy Regulatory Office. I have attached to my testimony a Ute 
Tribal Resolution setting out the need and propose of this office and 
providing proposed legislative text. This proposal utilizes existing 
funding and staff, but refocus these resources as a BIA Regional Office 
that would support BIA Agency Offices with high levels of energy 
permitting. We ask that this proposal be included in S. 2132 before it 
is approved by this Committee.
III. No-Cost Improvements to Indian Energy Permitting
    The Ute Tribe supports S. 2132, but much more needs to be done. In 
prior Congresses and in response to requests by former Senator Akaka, 
Senator Barrasso and, on the House side, Congressman Young, the Tribe 
developed 32 legislative proposals to improve Indian energy permitting, 
coordination and financing. The Tribe submitted these proposals to the 
Committee on July 11, 2011, and we included these proposals in our 
written testimony on a prior version of this bill, S. 1648, on April 
19, 2012. We incorporate our prior testimony and these 32 legislative 
proposals in today's testimony by reference.
    Today we highlight a few of these proposals that the Committee 
could include in S. 2132 without increasing the cost of the bill or 
government bureaucracy. The proposals we highlight would address gaps 
in the current system, clarify the authority of tribal governments to 
oversee energy activities on tribal lands and increase the resources 
available to tribes to address all aspects of energy development on 
tribal lands. These proposals are attached to my testimony. They 
include:

   ensuring that Communitization Agreements do not delay 
        royalty payments;

   ensuring that the Environmental Protection Agency's new 
        regulation of minor sources in Indian Country will not impede 
        energy development;

   clarifying tribal jurisdiction over right-of-ways;

   ensuring that tribes have the tax revenues needed to support 
        tribal infrastructure;

   limiting the number of times Interior can require revisions 
        to a Tribal Energy Resource Agreement Application;

   setting aside a portion of existing energy efficiency 
        funding for Indian tribes;

   setting aside a portion of existing weatherization funding 
        for Indian tribes;

   streamlining environmental reviews on Indian lands by 
        providing tribes with ``treatment as a sovereign'' status under 
        the National Environmental Policy Act (NEPA);

   clarifying that Indian lands are not public lands and 
        therefore are not subject to NEPA; and,

   preventing BLM's Hydraulic Fracturing Regulations, designed 
        for public lands, from applying to Indian lands.

    Through these legislative changes, Congress would greatly 
streamline energy permitting on Indian lands providing more revenues 
for tribal governments, on-reservation jobs and increased supplies of 
domestic energy resources. On our Reservation, a typical permit can 
take about 480 days to be processed-more than one year. The Tribe takes 
delays in the permitting process seriously because the number of 
permits approved is directly related to the revenues the Tribe has 
available to fund our government and provide services to our members.
    The Tribe understands that oil and gas companies operating on the 
Reservation are currently limiting operations based on the number of 
permits the agencies are able to process. In particular, companies are 
limiting the number of drilling rigs they are willing to operate on the 
Reservation. Drilling rigs are expensive operations that move from site 
to site to drill new wells. Oil and gas companies often contract for 
the use of drilling rigs. Any time a drilling rig is not actively 
drilling a new well, it amounts to an unwanted expense. Consequently, 
oil and gas companies will only employ as many drilling rigs as permit 
processing will support. On our Reservation, the Tribe understands that 
some oil and gas companies who are currently using one drilling rig 
would increase their operations to three drilling rigs if permit 
processing could support this increase.
    One example of this is the Anadarko Petroleum Corporation's 
operations on the Reservation. Anadarko reported that it needed 23 well 
locations approved per month in 2011 and beyond, but in 2010, their 
permits were approved at a rate of 1.7 per month. Anadarko informed the 
Tribe that unpredictable approvals of permits forces the company to 
alter its operational plans at the last minute and often results in the 
company temporarily moving its operations off the Reservation to state 
and private lands. With consistent and reliable permit approvals, the 
Tribe is hopeful additional drilling rigs will move on to tribal lands 
and increase the revenues available for the tribal government, our 
members, and our investments.
IV. Analysis of S. 2132, the Indian Tribal Energy Development and Self-
        Determination Act Amendments of 2014
    The Tribe supports S. 2132 and believes that it is a good start. S. 
2132 would amend existing laws to provide tribes with improved 
opportunities to manage their own energy resources. However, S. 2132 
only addresses a few areas of the law. Much more needs to be done to 
overcome barriers tribes face in Indian energy development and to put 
tribes on an equal playing field with state governments and other 
energy developers. In the rest of my testimony, I provide a section-by-
section analysis of S. 2132's provisions.
A. Section 101. Indian Tribal Energy Resource Development
    The Tribe supports the amendments proposed in Section 101, but, in 
at least one case, more is necessary. First, this section would require 
the Secretary to consult an Indian tribe when adopting or approving an 
oil and gas well-spacing program or plan on the Tribe's lands. This 
proposal was among the 32 legislative proposals submitted by the Tribe. 
For too long the BLM, on behalf of the Secretary, has approved well-
spacing plans on Indian lands without involving tribes. Even worse, BLM 
typically relies on well-spacing developed in State forums. Tribes 
should be involved in this decisionmaking process to ensure that Indian 
lands are being developed efficiently, that protected areas are 
avoided, and to ensure that tribes have every opportunity to work 
closely with their industry partners.
    Second, Section 101 also extends important planning authority to 
the Secretary of the Interior. When the Energy Policy Act of 2005 was 
passed, two Indian energy offices were created--one in the DOI and one 
in the Department of Energy (DOE). The DOE office was provided specific 
authority to assist tribes in overall energy planning. The DOI office 
was not provided similar authority.
    Both offices need this specific planning authority. Federal energy 
policy has long overlooked or ignored tribes. Today tribes are catching 
up quickly and need the same or similar federal assistance that states 
rely on to manage their energy resources. In addition, Congress must 
support this statutory authority with needed appropriations to help 
tribes overcome decades of neglect by federal energy policy makers.
    Third, Section 101 would require the Secretary of Energy to develop 
regulations for a long-overdue Indian energy loan guarantee program 
that was originally authorized in 2005 but never implemented. The Tribe 
believes that developing regulations would go a long way toward 
implementing the program and ensuring needed appropriations from 
Congress, but more is needed.
    The law also needed to be changed to actually require the Secretary 
of Energy to provide these loan guarantees. Current law only states 
that the Secretary ``may'' provide guarantees. Making the program 
mandatory would provide the Indian energy loan guarantee program with 
the same authority provided to the Title XVII loan guarantee program 
which was authorized at the same time for energy innovations. Under the 
Title XVII program, the law stated that the Secretary ``shall'' provide 
guarantees.
    We need similar energy innovations on Indian lands and we need 
similar laws to require that they be implemented. The Tribe 
specifically included this recommendation among its 32 legislation 
proposals because financing expensive energy projects is one of the 
most significant barriers to Indian energy development. Providing 
tribes with the opportunity to secure government backed financing would 
promote tribal self-determination in the development of energy 
resources because tribes would have the opportunity to be the owners of 
their development companies rather than relying on others to develop 
tribal resources.
    DOI currently manages a successful Indian loan guarantee program 
for tribal businesses, but it lacks the budget for more expensive 
energy projects. Tribes need the level of funding proposed by the DOE 
loan guarantee program to cover the investment needed for energy 
projects. With this level of funding tribes will be encouraged to be 
owners of their own energy projects and vast untapped tribal energy 
resources can be developed for the long-term benefit of tribal 
communities and the Nation's domestic energy supplies.
B. Section 102. Indian Tribal Energy Resource Regulation
    The amendments in this section would extend DOI funding 
opportunities for energy surveys and inventories to a new entity called 
a ``tribal energy development organization'' that is defined elsewhere. 
The Tribe believes that it would be useful for tribal energy 
development organizations to be able to receive funding through this 
program. However, it is more important and would advance Indian self-
determination for Congress to provide sufficient appropriations to fund 
Indian energy surveys and inventories in the first instance. Funding is 
needed to ensure that tribes can enter into energy development 
negotiations with sufficient information and thereby promote Indian 
energy development.
C. Section 103. Tribal Energy Resource Agreements
    The Tribe supports the changes Section 103 would make to the 
existing Tribal Energy Resource Agreement (TERA) program. As you know, 
the TERA program generally provides a process for Indian tribes to 
apply and potentially gain authority to approve leases, business 
agreements, and rights-of-way for energy development or transmission on 
their lands without Secretarial review. Many of the proposed changes in 
Section 103 would make the existing TERA application process more 
certain by providing timelines, requiring the Secretary to act on a 
TERA or it is deemed approved, and making more specific the reasons the 
Secretary may disapprove a TERA application. These are needed changes. 
I understand that since the program was created in 2005, no tribe has 
applied for a TERA, in part, because of the lengthy and uncertain 
application process.
    Section 103 would also expand some TERA authority to a new category 
of tribes. This new category would be tribes who have carried out a 
contract or compact under the Indian Self- Determination and Education 
Assistance Act (ISDEAA) involving activities related to the management 
of tribal land for not less than three years and without a material 
auditing exception. This new category of tribes may exercise TERA 
authority when the other party to the lease is a ``certified'' tribal 
energy development organization that is majority-owned and controlled 
by the tribe, or the tribe and one or more other tribes.
    The Tribe strongly supports this change to the TERA program. This 
change would provide tribes, with demonstrated experience, the 
authority to approve some of their own leases, business agreements, and 
rights-of-way without the delays inherent in Secretarial review and 
approval. The Tribe has long managed its own energy development, lands 
and natural and cultural resources. The Tribe's experience in these 
areas should be recognized by the Federal Government without the Tribe 
being forced to take the additional, extensive, and uncertain step of 
completing a TERA application.
    This change also promotes tribal self-determination and local 
control over the development of tribal energy resources. Tribes would 
be encouraged to develop tribally owned energy companies to develop 
their resources because tribes could enter into leases and agreements 
with tribally owned businesses without Secretarial oversight. This 
change allows tribes to avoid understaffed and bureaucratic federal 
agencies and the permitting delays associated with those agencies. 
Instead, tribes would be free to develop their own processes for more 
efficiently reviewing and approving leases and agreements with tribally 
owned businesses.
    The Tribe also strongly supports changes proposed in Section 103 
that would require the Secretary to make funds available to tribes 
operating an approved TERA pursuant to annual funding agreements--
similar to ISDEAA contracts. If the tribes are going to take over these 
responsibilities for the Federal Government, then the Federal 
Government must provide adequate funding to tribes. Although it is 
unclear how much funding would be available from the Secretary, any new 
opportunity for funding energy activities is a significant change.
    In addition to any federal funding may become available, tribal 
self-determination in the area of energy development would be better 
advanced if Congress affirmed tribes' exclusive authority to tax 
activities on Indian lands. Managing the permitting of energy 
resources, not to mention the infrastructure needs, is an expensive 
undertaking for any government. Tribes need the same revenues that 
other governments rely on to oversee and provide the needed 
infrastructure for energy development.
    Finally, the Tribe supports changes in Section 103 that would help 
to clarify the Secretary's trust responsibilities for leases and 
agreements negotiated pursuant to a TERA. The proposed changes use 
language that is similar to existing law for Indian Mineral Development 
Agreements 25 U.S.C.   2101-08 (1982) (IMDA). The IMDA's explanation 
of the Secretary's trust responsibilities has stood the test of time 
and is an appropriate model for the Secretary's trust responsibilities 
pursuant to a TERA.
D. Section 104. Conforming Amendments
    Section 104 expands the definition of ``tribal energy development 
organizations'' to include a greater variety of tribally owned business 
entities that can utilize the authorities provided to tribal energy 
development organizations. The Tribe supports this change. The Tribe 
agrees that it is important and will advance Indian energy development 
to specifically recognize and extend authorities to tribally owned 
business entities. In many cases, tribally owned business entities, as 
opposed to just tribal governments themselves, are needed for the 
practical and efficient development of resources.
E. Section 201. Issuance of Preliminary Permits or Licenses
    The Tribe supports Section 201 which would provide tribes with the 
same preference that states and municipalities have over private 
applicants for hydroelectric preliminary permits or licenses. It is 
appropriate to extend this preference to Indian tribes because tribal 
governments have many of the same public water development needs as 
state and municipal governments.
    However, subsection 201(b) ``Applicability'' is neither appropriate 
nor needed and should be deleted from S. 2132. This subsection would 
limit the tribal preference and is intended to protect previously 
issued preliminary permits and original licenses that had been accepted 
for filing. Subsection 201(b)(1) is not needed because the underlying 
law, 16 U.S.C.  800(a), already provides protection for previously 
issues preliminary permits. Section 800(a) provides that governments 
may only receive this preference ``where no preliminary permit has been 
issued.''
    Subsection 201(b)(2) is also not an appropriate protection for 
original licenses that have been accepted for filing. Congress already 
provided a process for ``competing'' license applications at 16 U.S.C. 
 808 and subsection 201(b)(2) should not attempt to override existing 
law. In Section 808, Congress encourages competition for licenses and 
provides standards to ensure the best development of public waterways. 
The proposed changes in subsection 201(b)(1) and (2) would limit 
competition and result in water projects that are not the best 
available for tribal and public waterways.
F. Section 202. Tribal Biomass Demonstration Project
    The Tribe supports Section 202 and requests that these provisions 
be made permanent and available to many tribes rather than just a 
limited demonstration project. Section 202 would require the Secretary 
of Agriculture or the Secretary of the Interior to enter into long-term 
contracts with tribes to collect woody debris on federal lands for 
biomass energy production. Longer contract terms are needed to help 
finance and justify the investment in biomass energy generation 
facilities. The Tribe could utilize a longer-term contact to test 
development of biomass facilities and make use of National Forests that 
have been included within our Reservation.
G. Section 203. Weatherization Program
    The Tribe supports the change proposed in Section 203, but thinks 
that it does not go far enough to make weatherization programs work in 
Indian Country. The Tribe requests that Section 203 be replaced with 
the weatherization proposal included among the Tribe's 32 legislative 
proposals. The Tribe's proposal includes a number of changes to the 
weatherization program so that it would work in Indian Country
    Section 203 would provide tribes with the ability to apply for 
direct access to weatherization funding. This authority should have 
been provided long ago. Under current law, Indian tribes are supposed 
to receive federal weatherization funding through state programs funded 
by DOE. However, very little funding reaches Indian tribes, despite 
significant weatherization needs.
    If a tribe wants to receive direct funding from the (Department of 
Energy) DOE, it must prove to DOE that it is not receiving funding that 
is equal to what the state is providing its non- Indian population. 
This arrangement is a violation of the government-to-government 
relationship between Indian tribes and the Federal Government, and the 
federal trust responsibility. DOE does not even track the 
weatherization needs of Indian tribes or the funding distributed to 
tribes. When former Senator Dorgan raised this issue with DOE in the 
111th Congress, DOE reported that it had no idea how much 
weatherization funding was actually received by Indian tribes.
    Over the years that the weatherization program has been in 
existence, tribes have missed out on millions in funding. Each year the 
weatherization program is funded at around $50 million per year, and 
under the American Reinvestment and Recovery Act of 2009 $4 billion was 
provided for weatherization needs. This funding is intended for low-
income households and should go to those who need it most. On Indian 
reservations poverty rates are 2 to 3 times higher than national 
averages.
    Section 203 should include additional changes to the weatherization 
program otherwise Indian tribes will still not be able to utilize the 
funding. As written, Section 203 requires tribes to comply with the 
same standards as state governments who have been receiving 
weatherization assistance for decades. This puts the burden on tribes 
to overcome decades of neglect by the Federal Government for energy use 
and management on Indian reservations. Without standards and training 
that are appropriate to Indian country, many Indian tribes will still 
not be able to utilize this funding opportunity. Section 203 should 
include reporting standards that make sense in Indian country and 
provide for training of energy auditors to serve Indian reservations.
H. Section 204. Appraisals
    The Ute Tribe supports streamlining the appraisal process and 
providing tribes options for obtaining appraisals. Interior agencies 
involved in energy development are already understaffed. Indian tribes 
and the Interior should be able to rely on appraisals conducted by the 
tribe itself or certified, third party appraisers.
I. Section 205. Leases of Restricted Lands for Navajo Nation
    This section provides that the Navajo Nation may submit regulations 
governing mineral leases for approval by the Secretary, and, once 
approved, would provide the Navajo Nation with the authority to approve 
mineral leases without subsequent review and approval by the Secretary. 
The Ute Tribe supports providing tribes with independent authority to 
approve mineral leases and believes this section should be expanded to 
include all tribes who submit mineral leasing regulations for approval 
to the Secretary.
V. Conclusion
    S. 2132 is a good start, but much more is needed to support and 
promote Indian energy development. Indian energy resources have the 
potential to provide many tribes and their members with long-term 
financial security and on-reservation jobs as well as increased 
domestic energy resources. However, to reach these goals, Congress and 
the Administration must improve and coordinate Indian energy 
permitting, provide tribes with access to federal energy programs, and 
clarify tribal authorities to provide the resources necessary to 
support Indian energy development.
    I would like to thank Chairman Tester, Vice Chairman Barrasso and 
members of the Committee for the opportunity to present this testimony 
on behalf of the Ute Indian Tribe. The Tribe stands ready to work with 
the Committee to find ways to eliminate barriers to Indian energy 
development. The current barriers have a direct effect on the Tribe's 
revenues, our ability to invest in the future, and the services we are 
able to provide our members, our children and grandchildren.
    Attachment 1

    
    
    
                                  
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