[Senate Hearing 114-383]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 114-383

    ACCESSING USDA RURAL DEVELOPMENT PROGRAMS IN NATIVE COMMUNITIES

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 22, 2016

                               __________

         Printed for the use of the Committee on Indian Affairs
         
         
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                      COMMITTEE ON INDIAN AFFAIRS

                    JOHN BARRASSO, Wyoming, Chairman
                   JON TESTER, Montana, Vice Chairman
JOHN McCAIN, Arizona                 MARIA CANTWELL, Washington
LISA MURKOWSKI, Alaska               TOM UDALL, New Mexico
JOHN HOEVEN, North Dakota            AL FRANKEN, Minnesota
JAMES LANKFORD, Oklahoma             BRIAN SCHATZ, Hawaii
STEVE DAINES, Montana                HEIDI HEITKAMP, North Dakota
MIKE CRAPO, Idaho
JERRY MORAN, Kansas
     T. Michael Andrews, Majority Staff Director and Chief Counsel
       Anthony Walters, Minority Staff Director and Chief Counsel
                            
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 22, 2016....................................     1
Statement of Senator Barrasso....................................     1
Statement of Senator Franken.....................................    24
Statement of Senator Heitkamp....................................    21
Statement of Senator Hoeven......................................    26
Statement of Senator Moran.......................................     4
Statement of Senator Murkowski...................................     3
Statement of Senator Tester......................................     2

                               Witnesses

Haugen, Lafe, Executive Director, Northern Cheyenne Tribal 
  Housing Authority..............................................     9
    Prepared statement...........................................    11
Salerno, Lillian, Deputy Under Secretary, Rural Development 
  Mission Area, U.S. Department of Agriculture...................     4
    Prepared statement...........................................     6
Schuerch, Timothy, President/CEO, Maniilaq Association...........    13
    Prepared statement...........................................    15

                                Appendix

Fiddler, Tanya, Executive Director, Native CDFI Network, prepared 
  statement......................................................    31
Response to written questions submitted by Hon. John McCain to 
  Lillian Salerno................................................    33

 
    ACCESSING USDA RURAL DEVELOPMENT PROGRAMS IN NATIVE COMMUNITIES

                              ----------                              


                        WEDNESDAY, JUNE 22, 2016


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:45 p.m. in room 
628, Dirksen Senate Office Building, Hon. John Barrasso, 
Chairman of the Committee, presiding.

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

    The Chairman. Good afternoon. I call this hearing to order.
    Today, the Committee will hold an oversight hearing on 
Accessing USDA Rural Development Programs in Native 
Communities. More than 88 programs administered by 16 different 
Federal agencies target rural economic development in the 
United States. The USDA administers the greatest number of 
rural development programs and has the highest average of 
program funds going directly to rural counties.
    According to the USDA's own Agriculture Census in 2012 just 
over 72,000 farms and ranches are owned and operated by Native 
Americans. The same USDA census found that among minority 
communities Native Americans operate the second highest number 
of farms and ranches, with the highest concentration being in 
the southwest United States, and the States of Oklahoma and 
North Carolina.
    In my own home State of Wyoming, tribal members work 
alongside their neighbors, growing and producing many of the 
agricultural products that feed American families every day. 
Again, according to the USDA Agriculture Census, American 
Indian and Alaska Native-owned farms account for approximately 
$3.3 billion of market value for the products they sell, yet 
many tribes are located in the some of the poorest rural 
communities in the United States.
    Approximately 30 percent of American Indians and Alaska 
Natives live in rural communities and nearly 40 percent of 
rural tribal jobs are dependent on agriculture. Despite these 
numbers, the Committee continues to hear that tribes lack 
access to USDA rural development programs, and many times as 
they say ``the proof is in the numbers.''
    As an example, in her most recent written testimony before 
the Senate Committee on Agriculture, Nutrition, and Forestry 
Subcommittee on Rural Development and Energy, Lisa Mensah, 
Undersecretary for Rural Development at the USDA, stated that, 
``Since 2009, USDA Rural Development has helped more than 1.1 
million rural families buy, refinance and maintain homes with 
$137.5 billion in Rural Housing Service investments.''
    However, only $1.3 billion from that period went to 
providing rural housing in tribal areas. That is just less than 
1 percent of the Rural Housing Service investments going 
towards Native communities.
    The comment we hear from tribes regarding Rural Development 
is that when a tribe identifies the right program to address 
their need, the process is a bureaucratic nightmare. Despite 
its $212 billion dollar loan portfolio, USDA has only invested, 
$3.1 billion dollars with tribes.
    With so many tribes located in rural areas, it is important 
for this Committee to understand how USDA Rural Development is 
working to conduct outreach with tribes, not only in the 
agricultural area, but also in rural business development, 
housing, and utility services.
    I am particularly interested in hearing from USDA on how 
they can better market and provide outreach their programs and 
opportunities to tribal communities. Why aren't tribes 
accessing these resources? What are the barriers and how can 
Congress and others assist?
    Before we hear from the witnesses, I would like to turn to 
Senator Tester for his opening comments.

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

    Senator Tester. Thank you, Mr. Chairman, for holding this 
hearing today to discuss the wide range of programs the USDA 
manages and how to ensure the tribal communities can better 
access these programs.
    I also want to thank the panels for being here today. I 
look forward to your testimony.
    The testimony received by the witnesses seems to paint a 
different picture than the one the USDA has submitted. The USDA 
talks about a large amount of work it is accomplishing in the 
Country over recent years which may, in fact, be true. I want 
to commend them for the work they have done and continue to do 
for tribal communities.
    On the other hand, we have testimony from the witnesses 
that paints a different story. Oftentimes, we hear from tribes 
they are not sure what programs are available through the USDA 
or that they had a bad experience in the past, so they just say 
the heck with it and no longer bother to access those programs. 
Both may, in fact, be correct.
    Hopefully, today we can learn if there is really a 
disconnect and discuss solutions for moving forward. It is 
obvious that tribal communities have figured it out. The ones 
that have figured it out greatly benefit from a variety of USDA 
programs whether it is rural housing, broadband connectivity or 
other infrastructure needs.
    However, I do think we can do more to make sure that all 
tribes are able to access these programs. Many tribal 
communities are rural, have high levels of poverty which are 
exactly the kinds of communities USDA programs can have the 
biggest impact on and are designed to help.
    Today, I hope to hear some ideas on how we can improve 
communication between the agency and tribes. I know many of the 
USDA programs are not specifically geared to Indian Country, so 
maybe increased training for agency staff on working with the 
tribes would be helpful and vice versa.
    I do not know the right answer, but I do believe this 
hearing is an important step to re-engage on issues of critical 
importance to Indian Country.
    I want to thank the witnesses for coming to testify. Our 
two tribal witnesses have come a long way to be here. I 
specifically want to thank Lafe Haugen for continuing to serve 
the Northern Cheyenne and Indian Country in general.
    Lafe, you have been working on housing issues for so long 
that we are going to change your last name to Lafe Housing. He 
is a great asset to Indian Country, not only in Montana, but 
across the Country. I really appreciate the work and the 
openness he has had with my office.
    I appreciate your willingness to share your ideas. I look 
forward to finding solutions to making these USDA programs 
better.
    On a side note, I have to hop out of here to go to yet 
another hearing but I will be reading the transcript of this 
hearing and will be looking for solutions.
    Thank you, very, very much.
    The Chairman. Thank you, Senator Tester.
    Senator Murkowski, I know you would like to introduce one 
of our witnesses.

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

    Senator Murkowski. Thank you, Mr. Chairman.
    I want to thank you for having this hearing. I guess the 
last time we actually had a review on this subject was back in 
2009. There has been a lot that has changed in the State of 
Alaska in that period of time with regard to USDA and Rural 
Development, specifically in western Alaska.
    We have had three rural offices close in the communities of 
Nome, Dillingham and Bethel. These are all very remote; you 
cannot access them by road. They are unique in the sense of the 
very, very high cost in terms of services, utilities, fuel and 
goods.
    As we look at the challenges in accessing telecom or 
housing stock, unemployment, creating economic opportunities 
and jobs is why we look to USDA for some assistance. Tim 
Schuerch is in a unique position to speak to that today as the 
President and CEO of Maniilaq Association based out of 
Kotzebue.
    I think Tim will not only be able to speak to some of the 
challenges in the region as it relates to climate, 
infrastructure, energy, and economic development. These are all 
areas under the scope of USDA Rural Development programming and 
the funding that is vital to our State.
    There have been some cooperative agreements with some 
potential here. I think we will have an opportunity to hear 
about that.
    Tim, you have come a long way to be here with the Committee 
this afternoon. Know that I greatly appreciate not only your 
willingness to travel and speak before the Committee and put 
these issues on the record, but your leadership within Maniilaq 
and within the State. Welcome to the Committee.
    The Chairman. Thank you very much, Senator Murkowski.
    Would other Senators like to make an opening statement? 
Senator Moran.

                STATEMENT OF HON. JERRY MORAN, 
                    U.S. SENATOR FROM KANSAS

    Senator Moran. Thank you, Mr. Chairman.
    I would just point out that I am here serving in my 
capacity as a member of this Committee but there are four or 
five of us on this Committee who are members of the Agriculture 
Appropriations Subcommittee.
    They are Senator Hoeven, Senator Daines, Senator Tester and 
we are very interested in hearing what USDA and our witnesses 
have to say so that we can work in that regard to make sure 
that we have a desirable outcome.
    I thank you, Mr. Chairman, for hosting this hearing.
    The Chairman. Thank you very much, Senator Moran.
    In a few seconds, I will invite the witnesses to begin. I 
would like to remind each of you that your full written 
testimony will be made a part of the official hearing record. 
Please keep your statements to five minutes so that we have 
plenty of time for questions. I look forward to the testimony.
    Two of the guests have been introduced but the third who 
has not yet been introduced is Ms. Lillian Salerno, Deputy 
Under Secretary for the Rural Development Mission Area, U.S. 
Department of Agriculture, Washington, DC.
    Ms. Salerno.

          STATEMENT OF LILLIAN SALERNO, DEPUTY UNDER 
        SECRETARY, RURAL DEVELOPMENT MISSION AREA, U.S. 
                   DEPARTMENT OF AGRICULTURE

    Ms. Salerno. Chairman Barrasso, Ranking Member Tester, 
Senator Moran, and members of the Committee, thank you for the 
opportunity to be here this afternoon to discuss the Department 
of Agriculture's Rural Development Mission Area and how Native 
communities access our programs.
    Rural Development, RD, as we are known in our community, 
manages a loan portfolio of more than $212 billion organized 
into three agencies: the Rural Utilities Service, Rural 
Businesses and Cooperative Service, and Rural Housing and 
Communities Facilities Program.
    Our fundamental mission is to increase economic opportunity 
and improve the quality of life for all rural citizens. We are 
committed to working tirelessly to fully utilize the enormous 
potential and opportunity our funds provide and nowhere is RD's 
assistance more vital than in America's Native communities.
    In order to achieve the maximum impact of our Federal 
resources, we believe place-based approaches are the best tool. 
Why? First, it is important to acknowledge, and we do, that 
tribal leaders know what is best for their communities.
    They know the conditions they want to change, the 
strategies it will take to get them there and the approach that 
will be responsive to the needs of their people. This requires 
respect for tribal sovereignty and self determination, 
including empowering Native families to make informed 
decisions.
    Individual, child and family support is fundamental to 
economic development. The nutritional, health care, child care 
and essential support needed to be available and accessible for 
work force development to occur and before investment will 
invest. This has resulted in the need and privilege to engage 
tribes with Federal agencies to think concurrently and 
holistically about implementation and capacity building.
    Second, tribal leaders and their citizens support what they 
help create. When tribal leaders are engaged and take ownership 
of their development goals, our joint efforts are much more 
successful. Federal agencies working with tribes have 
acknowledged this from the beginning. We know this is a 
partnership with tribes and not Federal programs for tribes.
    Finally, people respond better when they know where they 
are headed and there is a road map. We have learned throughout 
this process of the interconnectedness of place in Indian 
Country, combined with geographic isolation, lack of access to 
capital and other systemic issues make linear planning and 
implementation difficult and often impractical. Constant 
evaluation, feedback loops, adjusting and moving forward takes 
time but the results in terms of mutual trust, confidence in 
one another and the process and a commitment to stay in it for 
the long haul is producing results.
    This Administration and Secretary Vilsack place a high 
priority on improving program delivery to Native communities. 
In addition to our tribal promise zone designees, tribal areas 
throughout the Country are benefitting from RD programs, 
housing, utilities and business creation.
    Since 2009, total RD investments benefitting American 
Indians and Alaska Natives have exceeded $3.1 billion. Congress 
has provided RD with special tools to help drive investments to 
tribal members and throughout tribal areas. There are 
legislative mandates for tribal projects and programs that spur 
job growth, build water and wastewater projects and assist 
tribes, universities and community facilities receive funding.
    In the Water and Environmental Grant Program, this 
legislative mandate has funded nearly 600 projects totaling 
$544 million in loan and grant assistance since 2009. These 
efforts ensure Native communities have access to safe and clean 
drinking water.
    In this same time frame, RD has invested $159 million 
through business creation programs to create economic 
opportunities. This includes over $12 million invested in 
revolving loan funds to Native community development financial 
institutions. The legislative mandates allow RD to direct funds 
to the Native communities but financing projects that benefit 
American Indians and Alaska Natives are not dependent on or 
limited by the special tools Congress has provided.
    For example, in the year 2015, there was a total of $49.9 
million legislatively mandated to benefit tribal projects. In 
this same fiscal year, RD invested over $487 million for 
projects that directly impacted these communities, providing 
nearly 90 percent of RD's investments through our regular 
programs.
    Native communities also benefit from RD's field-based 
delivery structure. We have nearly 4,000 staff directly engaged 
with local lenders and community partners to solve problems and 
explore options for economic development. Additionally, RD 
State offices maintain Native American tribal coordinators to 
assist tribes.
    Thank you for your continued interest and support of RD 
programs and how tribal communities can access our programs. 
Together, we continue to make key investments in the future of 
tribal Nations.
    I appreciate the opportunity to testify before the 
Committee. I am happy to answer any of your questions.
    [The prepared statement of Ms. Salerno follows:]

 Prepared Statement of Lillian Salerno, Deputy Under Secretary, Rural 
        Development Mission Area, U.S. Department of Agriculture
    Chairman Barrasso, Vice Chairman Tester and Members of the 
Committee, I appreciate this opportunity to discuss how Native 
communities access the Department of Agriculture's Rural Development 
(RD) Programs.
    Rural Development's fundamental mission is to increase economic 
opportunity and improve the quality of life for all rural citizens. RD 
manages a loan portfolio of more than $212 billion organized into three 
agencies: the Rural Utilities Service (RUS), Rural Businesses and 
Cooperative Service (RBS), and Rural Housing Service (RHS). RD 
investments support rural residents looking for affordable, safe 
housing; municipalities seeking water, electric and telecommunications 
infrastructure and community facilities; and small rural businesses, 
coops, and agricultural producers looking to expand into new markets. 
Together, RD agencies work to help communities build stronger 
economies, create jobs, and improve the quality of life in rural areas.
    Nowhere is this RD assistance more vital than in America's Native 
communities. RD is fully committed to building on past investments and 
improving our ongoing support of American Indians and Alaska Natives. 
Secretary Vilsack and Rural Development Under Secretary Mensah place a 
high priority on improving program delivery to Native communities, and 
our programs are designed for communities with the greatest need.
    This Committee is well aware that the overlap is all too common 
among areas that are persistently poor, areas that are extremely remote 
and areas that are home to American Indians and Alaska Natives. I have 
seen firsthand, the ongoing economic distress, housing challenges and 
lack of infrastructure throughout Indian Country. Many RD programs are 
expressly designed to help alleviate the challenges faced in the most 
remote corners and persistently poor communities across the United 
States.
    RD agencies have a long history of investing in tribal economies. 
Since 2009, total RD investments benefitting American Indians and 
Alaska Natives have exceeded $3.1 billion. Thanks to your work, 
Congress has provided RD special tools to help drive investments to 
Tribal members and throughout Tribal areas. This includes funds that 
are legislatively mandated in RD's programs each year to assist Tribes, 
Tribal members and Tribal Colleges. It also includes the RUS 
Substantially Underserved Trust Areas (or SUTA) provisions. The SUTA 
provisions provide additional flexibilities in many of our utilities 
programs to help increase investments in trust areas that are 
substantially underserved.
    Historically, RD has had funds legislatively mandated for Tribal 
projects in the following programs:

   The Community Facilities program through the Tribal College 
        and University Grant Initiative

   The Rural Business Development Grant program

   The Intermediary Relending program, and,

   The Water and Environmental Grant program, which includes 
        funding for the Rural Alaska Village Grant program

    Since 2009, RUS has funded 591 Water and Environmental Grant 
program (WEP) projects totaling $544 million in loan and grant 
assistance to Native Americans. One example is the South Delaware 
County Regional Water Authority in Oklahoma, which received $9.65 
million. This project funds a new regional water authority providing 
1,140 Native American homes throughout the Cherokee Nation in Adair, 
Cherokee, and Delaware counties with wholesale water.
    In Fiscal Year 2015, WEP also provided more than $1.3 million in 
technical assistance to provide targeted technical assistance to Native 
American Tribes including the Inter-Tribal Council of Arizona, the 
Tanana Chiefs Conference in Alaska, the United South and Eastern 
Tribes, the Painted Desert Demonstration Projects, Inc., the Rural 
Community Access Partnership (RCAP) and the Native American Water 
Association. Additionally, WEP, in collaboration with the Environmental 
Protection Agency (EPA), conducts several workshops a year to educate 
rural and tribal system operators on asset management planning, water 
and energy efficiency practices and other sustainability management 
practices.
    Since 2009, RBS has invested $159 million through its programs to 
help create more economic opportunity for Tribes and Tribal members. 
Specifically, over $12 million has been invested in revolving loan fund 
capital to Native Community Development Financial Institutions (CDFIs), 
Tribes and other entities. These organizations provide low interest 
loans to help support Native owned businesses and native entrepreneurs. 
Over this same time, RD has provided additional funding for 
intermediaries to provide technical assistance, training, and other 
services to their customers working to create new jobs.
    Rural Development funding to American Indians and Alaska Natives is 
not dependent on, nor limited by, the special tools that Congress has 
authorized. For instance, in FY 2015, a total of $49.9 million was 
legislatively mandated to benefit tribal projects. During this same 
period, RD invested over $487 million for projects that directly 
impacted American Indians and Alaska Natives--which equates to nearly 
90 percent of RD's investments benefitting native communities provided 
through our regular programs.
    Just last year, RD announced a Community Facilities loan for $164 
million to the Yukon-Kushkowin Health Corporation, the only full-
service health care facility in an area almost the size of Oregon. This 
loan is four times larger than previous direct loans awarded through 
the program and was used to provide permanent financing for a new 
129,600-square-foot primary care clinic, a 110,000-square-foot hospital 
remodel, and additional housing for clinic staff in Bethel, Alaska.
    This Committee heard from RUS Administrator McBride in April on 
investments made in telecommunications projects serving Tribal Lands, 
Tribal Organizations, American Indians, and Alaska Natives totaling 
over $157 million since 2009. Telecommunications infrastructure loan 
programs ensure rural areas have access to reliable and affordable 
telecommunications systems. Since 1995, RUS has provided loans and 
grants to eight of the nation's ten tribally-owned regulated 
telecommunication carriers. RUS has also focused on connecting native 
and rural communities to broadband. The Community Connect grant program 
awards grants to communities with no access to broadband service and 
since 2009 this program has provided nearly $14 million to assist 
tribal communities.
    Native communities also benefit from RD's field based delivery 
structure--where nearly 5,000 staff, who live and work in every state, 
make and service loans and grants throughout Indian Country and Alaska. 
Additionally, RD state offices designate Native American Coordinators 
to assist tribes by providing technical assistance and programmatic 
knowledge and acting as a single point of contact for Tribes in their 
respective jurisdictions. These local partnerships help bring new 
projects to life.
    Rural Development is not making investments in a vacuum. Our staff 
and programs play a critical role in helping Tribes leverage core 
funding from other Federal agencies and funding sources. Each 
investment is the culmination of the combined efforts of Tribes 
themselves, RD staff and other Federal and non-profit partners. Each 
and every dollar that a Tribe or Tribal member accesses from a USDA 
program, takes pressure off those thinly stretched funding streams and 
allows Tribes to accomplish additional work and achieve additional 
successes.
    Rural Development is engaged in a number of interagency 
collaborative efforts including the Indian Country Infrastructure 
Interagency Task Force alongside the Department of Housing and Urban 
Development (HUD), Indian Health Services (IHS), the Environmental 
Protection Agency (EPA) and the Department of the Interior; a working 
group on Native American Homelessness spearheaded by the United States 
Interagency Council on Homelessness; a working group headed up by HUD 
focused on streamlining the environmental review process for Indian 
housing projects; and a more focused approach on training alongside of 
the Federal Communication Commission (FCC) on Tribal broadband and 
telecommunication opportunities.
    As RUS Administrator McBride testified to this Committee in April 
2016, USDA and FCC are working closely to coordinate outreach efforts. 
At the end of May, the FCC hosted a Tribal Broadband, Telecom, and 
Broadcast Training and Consultation Workshop in Great Falls, Montana. 
RD staff participated throughout the workshop and provided information 
about RUS and its programs spanning four distinct sessions. Topics 
covered included the Community Connect Grant Program, the Distance 
Learning and Telemedicine Grant Program and the SUTA provisions and 
related loan programs. RUS staff will participate in additional 
workshops hosted by the FCC throughout the remainder of the fiscal year 
in Seattle, the upper Midwest and the Southwest including Oklahoma.
    In the area of rural housing, just last week RD field staff from 
around the country received training to improve the delivery of RD's 
homeownership programs on Tribal trust land. RD has delivered 
homeownership loans on Tribal trust lands for some time now, but it 
remains an ongoing and significant challenge. Since FY 2000 10 percent 
of RD direct homeownership loans to Native Americans have been on 
Tribal trust land, which we believe we can improve.
    The training focused on building partnerships with Tribes, with 
Tribally Designated Housing Entities and with other federal partners 
invested in the process, to increase homeownership opportunities 
throughout Indian Country and Alaska. In addition to the RD trainers 
and participants, sessions during the training were provided by Bureau 
of Indian Affairs (BIA) staff regarding the Housing Improvement Program 
(HIP), the land leasing process and the Helping Expedite and Advance 
Responsible Tribal Home Ownership (HEARTH) Act of 2012. HUD staff 
provided information regarding its 184 Loan Guarantee program, the 
Indian Housing Block Grant program and the Indian Community Development 
Block Grant program. Veterans Affairs staff also attended and provided 
information regarding its homeownership programs for Native American 
Veterans. And finally, staff from the Consumer Financial Protection 
Bureau (CFPB) attended and contributed to the discussions.
    These two days of training, coordination, and education served as 
an important first step in how RD can focus on this challenge. We 
remain committed to working on strategies to provide additional 
homeownership opportunities on Tribal trust land. We will continue to 
collaborate with Tribes, the Tribal housing industry, BIA, HUD, and the 
VA whenever appropriate and possible.
    Another significant way RD has been working to improve the impact 
of its investments in Native Communities is through collaborative, 
place based efforts like the StrikeForce and Promise Zone initiatives. 
The Promise Zone designation partners the Federal Government with local 
leaders who are addressing multiple community revitalization challenges 
in a collaborative way and have demonstrated a commitment to results. 
In the first two rounds of the Promise Zone initiative two tribal 
Promise Zones were designated: the Choctaw Nation of Oklahoma and the 
Pine Ridge Indian Reservation of the Oglala Sioux Tribe in South 
Dakota. Earlier this month two additional tribal Promise Zones were 
designated: the Spokane Tribe of Indians in Washington and the Turtle 
Mountain Band of Chippewa Indians in North Dakota.
    These Tribal Promise Zones were selected through a transparent 
application process that demonstrated the strength and effectiveness of 
their local partners' commitments. Each Promise Zone Designee receives:

   The opportunity to engage five AmeriCorps VISTA members in 
        the Promise Zone's work,

   A federal liaison assigned to help designees navigate 
        federal programs, and,

   Preferences for certain competitive federal grant programs 
        and technical assistance from participating federal agencies.

    The first two tribal Promise Zones have achieved some significant 
accomplishments to date. For instance the Choctaw Nation of Oklahoma 
leveraged its designation to secure a $21 million New Markets Tax 
Credit investment to build an environmentally sustainable steel 
manufacturing facility in the Promise Zone. The mill will support 
approximately 300 new jobs in the region. At the same time, the lead 
applicant of the Promise Zone at Pine Ridge, Thunder Valley Community 
Development Corporation, is well on its way to building a sustainable, 
regenerative housing community on the Reservation. With the 
announcement of two additional Tribal Promise Zones, we are looking 
forward to doubling down on these efforts to invest strategically and 
collaboratively build brighter futures for American Indians and Alaska 
Natives.
    Thank you for your interest in USDA Rural Development and thank you 
for your support of our agency and its mission. Together, we can 
coordinate and leverage our resources to invest in the future of this 
country's Native communities. I appreciate the opportunity to testify 
before you today. I am happy to answer any questions that you might 
have.

    The Chairman. Thank you very much for your testimony, Ms. 
Salerno. We appreciate having you here today.
    Mr. Haugen.

STATEMENT OF LAFE HAUGEN, EXECUTIVE DIRECTOR, NORTHERN CHEYENNE 
                    TRIBAL HOUSING AUTHORITY

    Mr. Haugen. Good afternoon, Chairman Barrasso, Vice 
Chairman Tester, and members of the Senate Committee on Indian 
Affairs.
    My name is Lafe Haugen. I am an enrolled member of the 
Northern Cheyenne Tribe located in the great State of Montana. 
I am also the Executive Director for the Northern Cheyenne 
Housing Authority. I am currently serving my 24th year in this 
program. I am both honored and humbled to sit here before you 
today to give testimony on USDA Rural Development in Indian 
housing.
    First, I would like to start by talking about the Native 
American Housing Assistance Self Determination Act, NAHASDA. I 
realize this is a hearing on USDA, but without funding from 
NAHASDA, tribes will not have the necessary resources to be 
able to leverage with entities such as the USDA.
    NAHASDA was to be reauthorized by the end of 2015 but it 
did not receive the necessary votes. Without congressional 
authority, it is vulnerable to cuts in funding or possible 
elimination. I respectfully urge Congress to reauthorize this 
valuable source of funding in the coming months so that we can 
ensure continued housing for all Native Americans.
    Since NAHASDA was passed in 1996, USDA has promised to 
deliver program funds to Indian tribes and organizations, yet 
this has not materialized. Every program they promote, 
including the ten housing programs in the State of Montana, has 
an application in Indian Country, yet tribes only receive a 
fraction of the funding they are eligible for.
    This problem primarily is related to the restricted lands, 
including land in trust. From 1993 until 2004, USDA made a 
tremendous effort to set goals to improve its presence in 
Indian Country. In fact, they developed the Native Lending 
Guide accordingly.
    By and large this effort failed, especially on tribal 
lands. Yet, Rural Housing Services continues to try and address 
this weakness with still no viable solutions or answers, in my 
opinion.
    Over the last year, USDA Housing Administrator, Tony 
Hernandez, along with his tribal Coordinators, Ted Beulow and 
Lynn Trujillo, have been working with tribal coalitions and 
housing associations in Montana and South Dakota to help 
develop solutions to the significant barriers to trust land 
applications of USDA housing resources. I personally applaud 
their efforts for taking this significant step.
    Back at home, Bruce Jones and John Walsh, State Directors 
from South Dakota and Montana, are attempting to produce 
Memorandums of Understanding with their respective tribes that 
would demonstrate how these valuable programs might be 
delivered with more authority and oversight at the tribal level 
regarding loan origination and if necessary, loan mitigation. I 
would ask the Committee to encourage the USDA to offer maximum 
flexibility to these States to complete the MOU's.
    Unfortunately, numbers speak for themselves. Between 2000 
and 2015, USDA provided 3,420 Section 502 loans to Native 
Americans across the Country. That is about 228 loans per year.
    The USDA-sponsored 515 multi-family rental projects have 
become even scarcer. In fact, not one single 515 project was 
financed on trust lands over the last four years, with only one 
being approved in the last six years. This is unacceptable if 
we plan on making inroads with the homeless. Recent NAIHC data 
shows an unmet need in Indian Country of over 200,000 houses 
and that number is growing.
    Of the ten housing programs being offered by State USDA 
offices, Montana tribes only qualify for the 504 grant which is 
focused on minimal home repair for the elderly. The rest of the 
housing programs require extensive documentation ranging from 
the cumbersome environmental process to the issue of 
foreclosure. The State office has issues with taking these 
items to tribal courts.
    With HUD, we have already worked out all of these issues. 
We feel the State office could follow suit with their housing 
programs. A solution would be to bring back the position of the 
State USDA Native American Coordinator.
    My tribe is fortunate enough to have both capacity and 
perseverance when it comes to dealing with the USDA. We have 
trudged through the cumbersome application process and have 
successfully utilized several grants including the Rural 
Utility Service Loan, a grant used to build the much-needed 
water system in the community of Muddy Cluster; the Rural 
Energy for America Program Grant to Chief Dull Knife College 
and the Lame Deer Boys and Girls Club in assisting them with 
funds for energy efficiency purposes; a solid waste grant which 
provided for the purchase of new equipment for the solid waste 
transfer station; and the Real Business Enterprise Grant which 
my program received which is being used to build a 5,000 square 
foot business center in downtown Lame Deer. The Northern 
Cheyenne Tribe is very grateful for all of this assistance.
    The tribes in Montana make up about 15 percent of the 
population served by USDA. I believe a State set-aside of funds 
that reflect this number would be a solution. Tribes would 
still have to submit applications and meet all the requirements 
but this would give them yet another opportunity to solve their 
housing problems.
    I believe the pressure of requesting more funding from HUD 
could be lessened with another Federal entity coming to the aid 
of the tribes.
    Both Federal programs target the low income populace of 
rural America. Indian tribes, for the most part, reside in 
rural America and the poverty in Indian Country is well 
documented. It is our hope and intent that this hearing will 
lead to proposed changes that could be included in the coming 
year's Farm Bill that would call for regulatory changes and 
make any USDA programs more accessible and usable for all 
tribes.
    Thank you for allowing me to speak, Mr. Chairman.
    [The prepared statement of Mr. Haugen follows:]

    Prepared Statement of Lafe Haugen, Executive Director, Northern 
                   Cheyenne Tribal Housing Authority
NAHASDA Reauthorization
    The NORTHERN CHEYENNE TRIBE, and other Tribes across the country, 
had high hopes when the Native American Housing Assistance and Self-
Determination Act of 1996 (NAHASDA) (P.L. 104-330) was enacted. With 
its emphasis on self-determination, this new Act gave the Northern 
Cheyenne Tribe, through its Tribally-Designated Housing Entity (TDHE), 
the authority to put its housing funds to work in ways that best served 
our tribal community.
    I know that this Hearing was set to discuss Tribal access to USDA 
Housing resources, but the point that I want to make is that without 
the reauthorization of NAHASDA, Tribes will not have the resources to 
pursue other resources including USDA. One of the primary purposes of 
NAHASDA was to provide funds for Tribes to leverage with other Federal 
and Public resources to address their unmet housing needs.
    Congress was required to reauthorize NAHASDA by 12/31/2015 after 
passing a continuing resolution in 2013. This program is currently 
without Congressional authority and is vulnerable to cuts or 
elimination until a bill is passed. It seems that many Congressman and 
Hill committee staff are unaware that NAHASDA is the only HUD funding 
available to Native American Tribes since they gave up access to the 
HUD 1937 ACT Public Housing Program in exchange for an annual block 
grant. While funding has not increased in over 20-years, reduction or 
elimination would devastate Tribal housing programs for hundreds of 
Native Americans across the nation. Today, $650 million of annual 
funding is at risk!
USDA Separate Title
    Since NAHASDA was passed in 1996, USDA has promised to deliver 
program funds to Indian Tribes and organizations, yet it has not 
materialized. Every program they promote has an application in Indian 
Country, yet rural Tribes only receive a fraction of the funding that 
they are eligible for. This problem is primarily related to restricted 
lands including Tribal Trust. From 1993 until 2004, USDA made a 
tremendous effort to set goals to improve its presence in Indian 
Country. In fact, they developed a ``Native Lending Guide'' 
accordingly. By and large, the effort failed, especially on Tribal 
lands. Yet, Rural Housing Services continues to try and address this 
weakness with no answers.
    Recently, the USDA Housing Administrator Tony Hernandez along with 
his Tribal Coordinators; Ted Beulow and Lynn Trujillo have been 
feverishly working with Tribal Coalitions and Associations in Montana 
and South Dakota to help develop solutions to the significant barriers 
to Trust land applications of USDA housing resources. Two weeks ago, 
USDA hosted a meeting right here in Washington DC with their staff and 
other Federal Agencies to further explore solutions. I personally 
applaud their efforts for taking this significant step.
    A problem that exists in Indian Country is building Capacity at the 
Tribal level. Unfortunately, many rural Tribes still lack Capacity and 
lending infrastructure. The Housing Associations, Coalitions and 
Housing Professionals in our region continually work on informing and 
educating Tribes and their members on the value of individual home 
loans. Many Native Americans are not familiar with the concept of home 
mortgaging as there were not exposed to this in the pre-HUD era when 
only Tribal homes were available.
    There exists a need for additional funding for Education and 
Technical Assistance to be able to provide Tribes with Financial 
Literacy and Homebuyer Training to be able to move forward with the 
rest of America. With this information, Tribes will be better able to 
develop the concept of Homeownership and building Wealth in their 
homes. We feel that the Northern Plains region is the perfect area to 
continue to develop this concept as they have the most Trust land and 
the greatest need.
    In the past, both Neighborworks and the Rural Community Assistance 
Corporation (RCAC) have provided funding in this area. I believe that 
their funding originates with USDA. There are some cases where these 
entities went to Tribes to provide Technical Assistance and Homebuyer 
Training, but unfortunately, they ended up being educated. We believe 
that the organizations in our region like the Montana/Wyoming Housing 
Coalition and South Dakota Homeownership Coalition should receive this 
funding as they are specifically geared towards working with and 
educating Tribes in these areas.
    Currently, Bruce Jones and John Walsh, State Directors from South 
Dakota and Montana are attempting to produce Memorandums of 
Understanding with their respective Tribes that would demonstrate how 
valuable these programs might be delivered with more authority and 
oversight at the Tribal level regarding loan origination and if 
necessary, loan mitigation. I would ask the committee to encourage the 
USDA to offer maximum flexibility to these States to complete the MOU's 
with the hope that a successful process of a loan production can begin 
on restricted lands.
    Please consider these statistics: between 2000 and 2015, USDA 
provided 3420 Section 502 loans to Native Americans across the Country. 
That is about 228 loans per year. 10 percent or about 20 loans a year, 
are financed with the 502 program on restricted land. Recent National 
American Indian Housing Council (NAIHC) shows an unmet need in Indian 
Country of over 200,000 houses and growing. USDA sponsored 515 Multi-
family Rental projects have become even more scarce. In fact, not one 
single 515 project was financed on Trust lands over the last 4-years 
with only one (1) being approved in the last 6-years! This isn't 
acceptable.
Northern Cheyenne
    The Northern Cheyenne Tribal Housing Authority, TDHE for the 
Northern Cheyenne Tribe, has been working hard for many years to 
utilize a variety of funding sources to fund its housing activities, 
including non-NAHASDA grants, low-income housing tax credits, and HUD 
loan guarantees. However, we have our sights set on utilizing funding 
from USDA. In the last few years, we have stepped up our efforts to 
make progress in making USDA funding more tribal-friendly with several 
meetings in Bozeman and throughout the State. Unfortunately, 
significant barriers still exist at the state level where the funding 
is distributed. In spite of initially responding to Commission 
initiatives and establishing Native American outreach, few USDA offices 
have met Native American goals established in the late 1990's. In fact, 
the State office in Montana has phased out their Native American 
Coordinator position in spite of little success in matching USDA Rural 
Development's resources with huge unmet need on Montana's Indian 
Reservations.
    However, the Northern Cheyenne Tribe has trudged through this 
cumbersome application process and has successfully utilized USDA Rural 
Utilities Service (RUS) loans and grants to build and improve a water 
system from the town of Lame Deer to the town of Muddy Cluster. In 
addition, USDA has been a good resource to Chief Dull Knife College and 
the Lame Deer Boys and Girls Club in assisting them with funds for a 
variety of purposes. Recently, USDA provided funding for the purchase 
of new Equipment for the Solid Waste Transfer Station which is now in 
full operation. The Northern Cheyenne Tribe is very grateful for all of 
this assistance.
    The Northern Cheyenne Tribal Housing Authority, in cooperation with 
the Northern Cheyenne Tribe, submitted an application for the Rural 
Business Enterprise Grant (RBEG) and we were successful. This all 
important funding is being used to construct a 10-business, 5000-Square 
foot Business Center in downtown Lame Deer which will entice and 
stimulate Economic Development at the local level. This is a much 
needed building that will attract tourists and customers from all over 
the country and world as they travel highway 212 on their way to the 
Black Hills.
    However, we desperately need resources that USDA provides in other 
areas including Water/Sewer improvement, Community facilities as well 
as the potential benefits of the several USDA Rural Housing Services. 
Whenever Tribal Leaders or their housing professionals attend events 
where information is being presented by USDA Rural Development, they 
inevitably hear how USDA Rural Development Programs can build entire 
rural communities and cities.
    We hear firsthand about programs that can build housing, roads, 
water and sewer infrastructure, community buildings, provide police and 
fire vehicles, economic development programs etc., and when we ask for 
information on how much of these USDA Rural Development programs 
funding has been spent or targeted for the seven reservations in 
Montana, there tends to be silence.
Proposal
    Tribes believe that effective development in tribal communities 
depends on cooperative arrangements among the Federal agencies that 
allow for the ability to combine resources. In fact, it would appear 
that without such combination of funding sources and inter-agency 
collaboration, Tribes will be unable to offer a full menu of housing 
products to build on the substantial progress made since the enactment 
of NAHASDA.
    A conservative estimate is that about 7\1/2\ percent of Montana's 
population are members of the seven Indian reservations. Considering 
the fact that only 50 percent of Montana's residents are qualify as 
rural, and therefore eligible to participate in USDA programs, the 
number of Indians that are eligible jumps to 15 percent. All 
reservations in Montana qualify for USDA programs. We suggest that 15 
percent of the total allocation of USDA funding for Montana be set 
aside and reserved for the Reservations.
    USDA Rural Development has many programs and resources that are 
targeted for the low income populace of rural America. Indian tribes, 
for the most part, reside in rural America and the poverty in Indian 
Country is well documented. It is our hope and intent that this Hearing 
would lead to proposed changes that could be included in the coming 
year's Farm Bill that would call for regulatory changes that would make 
USDA programs more accessible and usable for tribes.
    We are pleased to see an oversight hearing so that Tribes can 
request funding and support in a more direct manner that recognizes 
Self-determination.

        The attachment USDS Agencies Serving Montana has been retained 
        in the Committee files and can be found at http://
        www.fsa.usda.gov/Internet/FSA--File/mt--usda--directory.pdf

    The Chairman. Thank you so very much for your testimony.
    Now, we will hear from Mr. Schuerch.

    STATEMENT OF TIMOTHY SCHUERCH, PRESIDENT/CEO, MANIILAQ 
                          ASSOCIATION

    Mr. Schuerch. Thank you, Mr. Chairman and members of the 
Committee. I appreciate the opportunity to come here to share 
some of our experiences.
    We share Mr. Haugen's desire and concern that some of the 
programs the USDA has to improve outreach to the tribes need to 
be better supported. We find that is also the case in our part 
of Indian Country.
    As Senator Murkowski alluded, sometimes the outreach is not 
adequate. If I went to one of our tribal councils right now and 
asked, Members of the Noorvik Tribal Council, do you know what 
programs the USDA runs that might benefit your community and 
your tribe, I really do not think they would know what those 
are. I think that would also be the case with every one of the 
12 federally-recognized tribes we serve.
    Recently, there has been a little progress. The USDA did 
begin reaching out to us about a year ago to ask about the 
possibility of entering into MOAs directly with our tribes. We 
think that is generally a positive thing.
    It turned out that the amount of USDA funding for the 
outreach through that MOA for our region to serve the 12 tribes 
and 8,000 tribal members was $37,000. For the effort it took to 
negotiate that MOA, I do not know if that amount was 
particularly cost effective in terms of actually improving 
outreach and access for our tribes.
    Our experience is these MOAs are probably a good thing. It 
shows mutuality, respect and sincerity to reach out but the 
amount, probably at least for our part of Indian Country, 
should at least be enough for one full-time position which we 
would happily base at our tribal administrative offices.
    I would extend an invitation right here to the USDA. You 
can have an office in our tribal administration building if you 
funded one position just for outreach to our tribes and tribal 
members.
    There are some very positive things, some significantly 
positive things, which the USDA does for our tribes.
    Maniilaq Association is a tribal organization overseen by 
these 12 tribes in northwest Alaska. We suffer from high rates 
of unemployment, poverty, significant health disparities and 
Third World water and sanitation conditions.
    Over 10 percent of the homes in our region do not have 
access to adequate water and sewer. In these homes, water must 
be hauled from a community source. Tribal members use 
honeybuckets, which are five gallon plastic buckets lined with 
trash bags, to collect urine and feces which are then disposed 
of, in the most ideal circumstances, in a sewage lagoon.
    Lack of adequate water and sewer service in our region 
causes severe skin infections and respiratory diseases. Because 
of lack of adequate water and sewer, our region suffers some of 
the highest rates of invasive pneumococcal disease, IPD, in the 
Nation. These respiratory diseases particularly impact our 
young children, many of whom must be medevaced each year to 
Anchorage to receive intensive hospital treatment basically to 
save their lives.
    Access to safe and affordable water and sewer is the very 
foundation of creating healthy homes and healthy communities in 
rural Alaska and a key to narrowing our significant health 
disparity gaps. The USDA Rural Alaska Village Grant Program, 
the RAVG, part of RD, provides funding for the planning, 
development and construction of water and wastewater systems. 
These particularly impact our region.
    For fiscal year 2016, the USDA RAVG Program helped to fund 
planning studies for a new sewage lagoon in Noorvik, washateria 
upgrades in Kivalina and a list station rehabilitation project 
in Kotzebue. Actual construction funding was provided for the 
completion of a new water treatment plant in Buckland and 
repair of water service lines and Arctic box connection for 
homes in Kobuk.
    They also provide technical assistance to help train our 
operators. This operator training program is critical. When it 
is 40 below or colder and you have serious water and sewer 
problems, it is critical to have well-trained operators in each 
of the communities to take care of that system and make sure it 
works no matter what the weather.
    Energy costs are a significant issue for us as well. Twenty 
percent of our residents live in poverty, yet they spend up to 
$250 per month for water and sewer bills. The USDA is helping 
us through a series of programs to help find ways to conserve 
energy, make our systems more efficient, save money and 
ultimately lower the water and sewer bills for many of our 
lower income tribal members.
    Overall, we are concerned that the total funding for the 
RAVG was $23 million in 2015 but was reduced to $16.5 million 
in 2016. In our region alone, we have over $100 million of 
critical water and sewer project needs. Statewide, the number 
is about $1 billion.
    We cannot pay for this overnight. We need to chip away at 
it one step at a time. Our thought is that the RAVG funding, 
which is part of USDA's RD Program, is critical. It makes a 
huge difference in the health and safety of our tribal members, 
particularly with our children.
    We commend USDA for its efficient and effective use of 
these funds. We commend them as well for working closely with 
our tribes and tribal organizations. This program really is 
making a difference in Indian Country and Alaska.
    If the USDA were to look at the RAVG Program as a possible 
model for a pilot program nationally, they might be well 
advised to do that. We would certainly be happy to help and 
assist in any way we can to help out with that.
    That concludes my remarks, Mr. Chairman.
    [The prepared statement of Mr. Schuerch, follows:]

    Prepared Statement of Timothy Schuerch, President/CEO, Maniilaq 
                              Association
Introduction
    Maniilaq Association is an Alaska Native tribal organization 
representing twelve tribes in Northwest Alaska. We provide health, 
social and tribal government services through self-governance 
agreements with the Indian Health Service (IHS) and the Bureau of 
Indian Affairs (BIA). We are pleased to offer testimony on accessing 
United States Department of Agriculture (USDA) Rural Development (RD) 
programs. The RD programs offered are received within our communities 
through the lens of need and circumstances of our region. With that in 
mind, we provide introductory remarks on some of the critical interest 
areas of our region: climate change, clean energy, strategic 
infrastructure, education and workforce development and tribal 
consultation.
Northwest Alaska Critical Interest Areas
Climate Change
    The indigenous Inupiat roots of the people of Northwest Alaska 
stretch back thousands of years. Our communities have thrived in this 
remote corner of the globe for generations, and it is the traditional 
ways of knowing and skills that have carried our people. While other 
parts of the nation are just beginning to feel the impacts of climate 
change, Northwest Alaska has been at the forefront of this battle for 
decades, demonstrating preparedness, adaptation, and resiliency. 
Rapidly warming weather patterns modify the behavior of the animals and 
fish, and impacts vegetation we rely on to feed our families. Adapting 
to this new Arctic reality means changing how we hunt and gather while 
bringing together traditional knowledge with modern Arctic science to 
find a logical path forward. We work together, as we have done for 
millennia, in cooperation with one another.
    The State of Alaska is home to 54 percent of America's 12,383 miles 
of coastline with Northwest Alaska comprising approximately 1,200 of 
those miles. Four Northwest Alaska communities are located directly on 
the coast, and seven are within the five major river systems. In 
addition to coastal erosion, we see the effects of river erosion as ice 
melts quickly, the rivers rise and erosion cuts away roads, airports, 
shorelines and changes animal migration routes. After the initial 
surge, the rivers recede and residents report the rivers are actually 
lower than in previous years. It has been many years since our 
communities including Noatak, Shungnak, Ambler and Kobuk, have had 
goods delivered by barge, which greatly reduces the cost. In the 
community of Noatak, the river has eroded major roads, making 
transportation dangerous to its residents.
    Our region is home to the village of Kivalina, one of the world's 
most visibly impacted communities. Situated on a low-lying barrier 
island, Kivalina historically was protected from the Chukchi Sea by a 
layer of thick ice. However, rising global temperatures melted the 
protective Kivalina ice sheet. Now, fall and winter storms barrel into 
the community, bringing floods and severe erosion in their wake. Water 
resources, subsistence foods, critical infrastructure, economic 
development, education of children, and the overall quality of life is 
at risk because of a warming environment. Coastal erosion in Kivalina 
impacts every resident, every day. The U.S. Army Corps of Engineers 
predicts the current village site will be completely uninhabitable 
within 10 years due to melting ice, coastal erosion and rising sea 
levels. Building of this road is imperative now for the safety of 
village residents. It is not within the purview of any federal agency 
to currently assist and we urge you to designate and give appropriate 
authority to a federal agency to address community evacuation needs.
    Increased partnership, collaboration and funding is increasing in 
importance as climate change continues to threaten the lives of 
Americans residing in the Arctic.
Clean Energy
    Renewable energy and innovation has been a key component of the 
energy picture in Northwest Alaska. A case in point is the Kotzebue 
Electrical Association (KEA) Wind Farm, the northernmost wind farm in 
the United States. Since 1997, it has supplemented diesel power in 
Kotzebue and currently provides 20 percent of the town's electricity 
needs. Boasting the first utility grade wind farm in the state of 
Alaska, Kotzebue Electric Association installed three 66-kW turbines in 
1997. By 2011, the Kotzebue wind farm had grown to 17 wind turbines and 
represented the first megawatt of wind power in Alaska. Kotzebue now 
has a total installed capacity of 2.96 MW of wind, which displaces 
about 250,000 gallons of diesel every year. Today, the company is 
looking toward harnessing secondary loads for excess energy by 
supplying thermal energy to the local hospital and will be installing a 
utility scale lithium ion battery. Being above the Arctic Circle means 
there are more daylight hours in the year than in the rest of the U.S. 
The Northwest Arctic Borough sponsored solar installations in all of 
the regions communities to lower the cost of water and sewer with funds 
from the U.S. Department of Interior Coastal Impact Assistance Program 
(CIAP) grants. Solutions like this are helping but costs continue to 
remain high.
    Traditional non-renewable fuels are still needed for generation of 
electricity and for home heating in rural Alaska. Many Department of 
Energy programs focus solely on renewable energy. Our region is focused 
on a coordinated approach that includes hybrid systems designed to 
reduce diesel consumption and increase use of renewable energy as we 
recognize this is what will make Arctic projects successful.
Strategic Infrastructure
    As the world directs its focus northward, the U.S. lacks 
infrastructure in the Arctic. From a strategic perspective, Kotzebue is 
an ideal location to invest in infrastructure like ports, roads, energy 
upgrades and broadband because of its geographic position. Investing in 
our region will not only benefit the residents of Northwest Alaska 
today, it will provide the backbone of Arctic Infrastructure essential 
to national security and economic interests for generations to come.
    For more than 30 years, the City of Kotzebue, with support from 
partner organizations, has been working toward the building of a deep 
water port south of Kotzebue at Cape Blossom and an 11 mile road 
connecting our city and port. Currently, the region receives essential 
items such as fuel, vehicles, building supplies, and dry goods by barge 
and lightering service in Kotzebue. All village-bound products are 
transported from Kotzebue by small boat or airplane. The shallow-water 
lightering adds greatly to the cost of goods in Kotzebue and all of its 
outlying villages. The Cape Blossom Port will provide economic relief 
to all of the communities in Northwest Alaska by reducing the need for 
lightering. Moreover, the Cape Blossom Port is uniquely positioned in a 
safe harbor area that will allow the U.S. Coast Guard and other 
emergency response resources to respond to ship groundings, vessel 
emergencies and oil spills in the Arctic. A port at Cape Blossom will 
provide the United States a strategic location in the Arctic for future 
opportunities.
Education and Workforce Development
    Currently the unemployment rate for Alaska is 6.9 percent. 
Northwest Arctic's is 250 percent of the State of Alaska rate. In some 
villages up to 70 percent of the adults do not work. The workforce 
needs education and specific job training for the jobs that exist as 
well as for future jobs and careers designed to meet future challenges 
within the State and region. Our educational system is poised to 
prepare our students to meet these challenges. The Northwest Arctic 
Borough School District is the only public school district in the State 
with its own post-secondary training center school, the Alaska 
Technical Center. A new magnet school has been developed as partner to 
the Alaska Technical Center that is a school for high school and post-
secondary students, the Star of the Northwest. The innovative 
educational and job training programs we have established in Northwest 
Arctic require funding for increasing infrastructure and operational 
costs. Gap funding by the Federal government can make a significant 
impact for the good of the Inupiat people of Northwest Arctic.
Tribal Consultation
    We appreciate the recognition of tribal governments' unique legal 
relationship with the United States, as expressed in the Presidential 
Memorandum on Tribal Consultation and Executive Order 13175. We 
understand that the USDA has a tribal consultation policy in place, and 
we encourage and remind the USDA to implement it consistently.
    First, I would like to thank the Alaska Office and the Office of 
Tribal Programs for their periodic electronic newsletters and notices. 
We appreciate that the staff make an effort to compile and distribute 
information about USDA funding, training and other opportunities.
Accessing USDA RD Programs in Northwest Alaska
    Below are some of the specific ways in which the opportunities 
provided by USDA RD have been meaningful to Maniilaq Association.
Alaska Code Blue Project
    The Alaska Code Blue Project was started in 1999 in an effort to 
identify, prioritize and seek funding for essential equipment for rural 
emergency medical services in Alaska. Funding for the Project is 
provided by the State of Alaska, Denali Commission, tribal health 
corporations, communities, local emergency medical services, and USDA 
RD. The contribution of USDA to this program has been key to its 
success. In the past, it has helped us purchase much-needed medical 
equipment and has been crucial to the operation of our telemedicine 
program, which enables us to provide health care in some of the most 
remote villages in the world. This year, we are applying for funds to 
contribute toward the purchase of a patient transportation vehicle for 
the Kivalina Clinic.
Utuqqunaat Inaat Loan Guarantee
    In 2012, USDA RD guaranteed a loan which comprised a portion of the 
total funding used to build Utuqqunaat Inaat, our 18-bed long term care 
center we opened in 2011. Utuqqunaat Inaat, meaning a ``place for 
Elders'' in the Inupiaq language, is one of our most treasured 
facilities, because it enables Elders to remain in their home region 
throughout the last of their days rather than having to be sent to 
Anchorage or further to receive the care they require.
    Also of tremendous importance to our operation of Utuqqunaat Inaat 
was the Agricultural Act of 2014 (also known as the ``Farm Bill'') 
Section 4033, which allows the donation to and serving of traditional 
food through food service programs at public facilities and non-profit 
facilities operated by Indian tribes and tribal organizations. 
Traditional foods were defined to include wild game meat, fish, 
seafood, marine animals and plants and berries. On September 2, 2015, 
Maniilaq served the first meal authorized by this Act at Utuqqunaat 
Inaat--musk ox soup. It was a day of celebration in Kotzebue, and USDA 
staff were there to celebrate and eat with us.
Cooperative Agreement
    Last fall, Maniilaq and USDA signed a Cooperative Agreement for the 
period of September 30, 2015 through December 31, 2016. The purpose of 
the Agreement is:

         ``to improve access to Rural Development programs to remote 
        and isolated regions of Alaska. The Agreement will support 
        Rural Development's StrikeForce and community economic 
        development efforts and enhance Native American business 
        development by leveraging partnerships and resources of diverse 
        institutions and organizations.''

    The total amount of federal funds obligated under the Agreement is 
$37,000. As a tribal nonprofit corporation providing health, social and 
tribal government services, we are pleased that the USDA sought to 
partner with us; however, the purpose of the Agreement aligned better 
with the work of the Northwest Arctic Borough economic development 
department. Therefore, we subcontracted with the Borough to implement 
the Agreement. The Borough has held community meetings in 10 villages, 
met with the city and tribal governments, and distributed materials 
containing information about USDA programs in each of those villages. 
The Borough has made updating on USDA programs a part of its regular 
monthly Assembly meetings, after which Assembly members are able share 
the information with their constituent communities. We are grateful for 
the opportunity to disseminate information about the USDA's programs in 
our region. The challenge we face is that the federal obligation under 
the Agreement is capped at $37,000. This is not enough to fund a full-
time position; therefore, the function is required to be tacked onto an 
existing position. With limited resources, we rely heavily on the 
person filling that position to have the capacity to add the USDA work 
to their already full plate.
Water and Sanitation Projects
    We thank the Rural Alaska Village Grant Program (RAVG) for helping 
us to address the urgent need for adequate water and sewer systems in 
Northwest Alaska. Every one of the 12 villages in our region has 
significant water and sanitation deficiencies. Although progress has 
been made, some of our villages, such as Kivalina, are still without 
running water and sanitation systems. Water must be hauled from a 
community source, and residents use 5-gallon buckets (commonly referred 
to as ``honeybuckets'') to dispose of human waste.
    A key to the USDA's successful outreach to meet the critical water 
and sanitation needs of our villages is the partnerships it has 
developed with and other Federal and State agencies. In our experience, 
the USDA's StrikeForce Initiative for Rural Growth and Opportunity has 
been effective in addressing some of our region's most critical water 
and sanitation needs, and we encourage the USDA to continue that 
program.
Conclusion
    Challenges to the health and economic well-being of Northwest 
Alaska remain. However, we are optimistic that with commitment, 
collaboration and hard work we will implement positive change and 
enable our region to thrive. Thank you for your consideration of our 
views.
                                 ______
                                 
                         Supplemental Testimony
Rural Alaska Water and Sanitation Needs in Northwest Alaska
    Maniilaq Association is a tribal organization that is overseen by 
and serves twelve federally recognized Tribes of Northwest Alaska. We 
suffer from high rates of unemployment, poverty, great health 
disparities, and Third World water and sanitation conditions.
    Over 10 percent of occupied homes in Northwest Alaska do not have 
access to adequate water and sewer systems. In these homes, water must 
be hauled from a community source, and tribal members use ``honey 
buckets'' (5-gallon plastic buckets lined with a trash bag) to collect 
urine and feces, which are then disposed of in a sewage lagoon.
    Lack of adequate water and sewer service in Northwest Alaska causes 
severe skin infections and respiratory illnesses. Because of lack of 
adequate water and sewer service, our region suffers some of the 
highest rates of invasive pneumococcal disease (IPD) in the nation. 
These respiratory diseases particularly impact our young children, many 
of whom must be medevac'd to Anchorage each year to receive the 
intensive hospital treatment that is necessary to treat their 
condition.
    Access to safe and affordable water and sewer is at the very 
foundation of creating health homes and healthy communities in rural 
Alaska. The USDA Rural Alaska Village Grant (RAVG) program provides 
funding for the planning, development, and construction of water and 
wastewater systems to improve health and sanitation in rural Alaska 
villages.
Water and Sanitation Projects
    In FY16 the USDA Rural Alaska Village Grant (RAVG) program helped 
fund the following work for our tribes:

        1.  Planning studies for a new sewage lagoon in Noorvik, 
        washeteria upgrades in Kivalina, and a lift station 
        rehabilitation project in Kotzebue.
        2.  Construction funding for the completion of a new water 
        treatment plant in Buckland and repair of water service lines 
        and arctic box connections for homes in Kobuk.

Technical Assistance and Training
    RAVG grants are also used to provide technical assistance and 
training. Our tribal organization is currently working with USDA in 
Alaska to secure $102,000 in FY16 technical assistance and training 
funds to educate and empower rural water/wastewater operators and 
utility administration.
    RAVG provides funding for the State of Alaska's Remote Maintenance 
Worker (RMW) Program, Remote Maintenance Workers are often the only 
frontline responders to help our communities solve technical water and 
sewer system issues. With winter temperatures below--40 degrees 
Fahrenheit, a quick and effective response is absolutely essential to 
maintaining services.
Lowering Ongoing Energy Costs
    RAVG also assists with lowering ongoing energy costs. The cost of 
providing water and sewer in rural Alaska is expensive due to the 
extreme weather, geographic isolation, engineering complexities, and 
high cost of energy. Some communities must charge up to $250 per month 
for water and sewer despite the fact that over 20 percent of their 
residents live below the poverty level. To help lower these costs, the 
USDA RAVG program has provided up to $40,000 in grant funding to 
implement the energy efficiency recommendations identified by the 
Alaska Native Tribal Health Consortium's energy audits of water and 
sewer infrastructure.
    Energy efficiency projects impacting our tribes include supporting 
Kobuk and Ambler with efficient lift station pumps; supporting Deering 
with sewer vacuum pump installation costs and training; and supporting 
Noatak with improving the energy efficiency of their boilers.
Trends and Future Funding
    Statewide, in FY15 the RAVG program contributed $23 million dollars 
towards Alaska sanitation project funding. However, in FY16 they 
contributed $16.5 million dollars, a $6.5 million decrease. In 
Northwest Alaska alone, we currently have unfunded critical sanitation 
project needs totaling of over $100 million dollars. Statewide, the 
unfunded critical sanitation project need is about $1 billion. We 
respectfully ask that the USDA continue to support the highly 
successful RAVG program at FY15 funding levels to continue to make 
meaningful progress in meeting these needs.
    We also respectfully ask that the USDA consult with all impacted 
tribe if it cuts funds or reduces services of this critical program in 
the future.
Conclusion and Recommendations
    It is our experience that the USDA's Rural Alaska Village Grant 
program is a highly effective, efficient means for leveraging local, 
state and federal funds to address the critical water and sanitation 
needs in our corner of Indian Country. Many of our tribal members now 
can now provide their children with clean and safe water and sanitation 
because of projects supported by the USDA's Rural Alaska Village Grant 
program. We commend USDA for its work and recommend it consider using 
the RAVG as a model for a national pilot program for Indian Country.

    The Chairman. Thank you very much, Mr. Schuerch.
    We appreciate the testimony of each of you today. I would 
like to start the questioning with Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    First, to you, Ms Salerno, you mentioned the cooperative 
agreements. I do encourage the department to make some real 
investment here and to ensure that there is proper outreach.
    Your comments, Mr. Schuerch, about the amount of funding 
that is available for the outreach, the reason you do outreach 
is because it is tough to get to these places. Tough means 
expensive, but making sure there is awareness is critically 
important.
    There has been discussion about housing, the need for 
housing and housing infrastructure. Right now, representatives 
from HUD are in Alaska having some meetings with housing 
agencies and tribes from around the State.
    I would like a commitment from you that you will work on 
interagency communications with agencies like HUD, with the 
tribes in the State or with Native CDFIs, to examine how we can 
better invest in infrastructure and housing in rural Alaska. I 
would ask for your continued commitment to work in that regard.
    Ms. Salerno. You have that commitment. We recognize we have 
challenges. Some of our programs are not perfectly tailored to 
the needs of Native communities for the host of reasons that 
were described.
    We are trying to do better to make sure our staff is 
trained and that we work with other parts of the Federal 
family. Part of that was evidenced earlier this month. We held 
tribal housing training which included BIA, HUD and the 
Consumer Financial Bureau. We are trying to come up with some 
creative solutions, so you have our commitment to keep working 
on that.
    Senator Murkowski. I think you have a great offer there 
from Maniilaq saying we have housing for you. If you are 
looking for on the ground education, it can certainly be 
provided there.
    Tim, I really appreciate what you have said in terms of the 
need for continued cooperation, collaboration and outreach 
making sure that what is available understood. I agree with 
you. People are coming to my office and do not know what is 
available, so are looking to us to marry them with the 
opportunities. We say USDA is out there, but you ought not to 
have to come all the way to Washington, D.C. to find that it is 
available.
    You mentioned the RAVG funding and the grants that are 
available for water and sewer and the difference that it makes. 
I know, because I hear it when I am back home, that these are 
making a difference.
    I appreciate what you have outlined to the Committee in 
terms of some of the issues we are dealing with. We are talking 
about basic needs, water and sewer. We are not talking about 
big systems or upgrade systems. We are talking about installing 
them for the very first time, to be able to have a water 
system. To be able to have a toilet that you can flush for the 
first time is news-breaking. It is worthy of ribbon cuttings, 
and I have been there as we have flushed a toilet multiple 
times in Buckland.
    You mentioned washaterias. I actually had somebody ask me 
why are you all spending money for basically a washateria? Does 
nobody have a washing machine? We do not have water and sewer, 
so not only do we not have washing machines in a person's home, 
we do not have water so you can wash hands. We do not have a 
shower so you can bathe your children.
    A washateria is a place where you go to wash your clothes 
but it is also the place that you go for a shower. We are 
talking about some pretty basic things. These grants that are 
made available are significant.
    When we talk about basic infrastructure, we are not asking 
for fancy stuff, but it is a high cost. It is critical to the 
health of people out in these regions.
    Tim, I have run out of time but was going to ask you, in 
terms of partnering more and better with USDA, short of having 
them housed in your facility, what can we be doing better here 
to help facilitate that?
    Mr. Schuerch. That is a hard question.
    Senator Murkowski. You can think about it. We can work to 
develop that because I think going forward, that is exactly 
what we need to be doing, that partnering.
    Mr. Schuerch. Adequate funding of the Rural Alaska Village 
Grant Program. It is not enough money to meet all of the need 
but it is a real important part of the solution. It is my 
experience and the experience of our tribes, that money is 
being well used to make a difference in the lives of many 
tribal members, particularly the kids.
    Senator Murkowski. We will keep working on that with you.
    Thank you.
    Mr. Schuerch, we would welcome you to Kotzebue anytime.
    Ms. Salerno. Thank you, Senator.
    Senator Murkowski. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Murkowski.
    Senator Heitkamp.

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

    Senator Heitkamp. Thank you so much, Mr. Chairman, for 
holding this hearing.
    I think we all agree that permanent solutions can be found 
in economic opportunity in Indian Country and Native Alaskan 
Country, but economic opportunities are really not possible 
without infrastructure. There is no two ways about it.
    One of the most difficult pieces of infrastructure is 
housing. I have been shocked that we have been unable to 
complete NAHASDA. It is a cornerstone piece but I also know 
that NAHASDA in and of itself is not adequate to meet the 
housing needs.
    Recently on a trip to Turtle Mountain, Secretary Castro was 
in the first HUD housing project in Indian Country. He was 
devastated to see the disrepair and the conditions it was in 
and nothing to write home about. They had just come from Pine 
Ridge and believed the housing conditions in Turtle Mountain 
were actually worse than Pine Ridge, if you can imagine.
    I know you have since designated Turtle Mountain a Promise 
Zone. We look forward to implementation of that, but if we keep 
doing what we have always done, and even do it slower and less 
efficiently, we are going to fall further and further behind in 
terms of affordable housing.
    I want to tell you that Secretary Castro, I hope, will be 
in North Dakota having a HUD regional housing summit. We have 
been talking to our partners in Rural Development. We are 
hoping we will get some good ideas that can do public-private 
partnerships because there is not enough money here to do the 
things we need to do.
    With that said, I think, Ms. Salerno, Senator Tester and I 
were both quite honestly kind of shocked by the numbers. I 
think the Chairman said $212 billion in loan guarantees with 
only $3.1 billion actually in Indian Country.
    I recognize that some of those loans would cover Indian 
Country if they were given to the rural coop that is 
responsible for Indian Country or to an electric coop, but I do 
have to tell you that is inadequate, given that in our States, 
it is the highest poverty area in terms of rural poverty.
    If they did not apply, then we should know there is a 
problem outreach. We should know that somehow the repayment 
terms could be readjusted or the fear of taking on debt is one 
of the issues we are challenged with all the time in terms of 
Indian Country.
    I want to ask, beyond what Senator Murkowski talked about, 
this is to you Mr. Haugen probably, why is it that we only have 
such a small percentage of the commitment for Rural Development 
that has been deployed to Indian Country directly? Why do you 
think that is?
    Mr. Haugen. Personally, I think what we have been talking 
about for the last couple of minutes is the biggest reason. We 
do not have that outreach, that one-on-one. In addition, one of 
the grants we received two years ago, the Housing Preservation 
Grant, when we went to implement it with the local USDA 
representatives out of Billings, they were unsure how to 
implement it even though they had talked about having this 
grant for years. They were unsure how to implement it so it set 
us back a couple of months. I think the fact that USDA has lost 
some of their key staff is probably one of the reasons there 
has not been much outreach.
    Senator Heitkamp. Ms. Salerno, can you offer some 
suggestions on how we could do a better job addressing needs in 
Indian Country with USDA funding?
    Ms. Salerno. A couple of things, Senator Heitkamp. I just 
want to make sure we are talking apples to apples. The loan 
portfolio is $212 billion over our history. Rural Development 
is pretty much a development bank that also provides grants.
    It is not a $3.12 billion over $212 billion; it is what we 
get from our appropriated dollars. When we did $500 million in 
Indian Country last year, that is out of approximately $29.5 
billion.
    It still may not be enough; it probably is not enough, but 
it is over that year period so the percentages are 5 percent. 
It is $500 million over $29.5 billion what we put out.
    The $3.1 billion that we have done in the Obama 
Administration is about double what we did over the previous 
eight years. We are making traction.
    What you are worried about is, are we doing enough 
outreach? Why are we not getting a bigger percentage?
    Senator Heitkamp. I worry that if we are going to create 
economic opportunity in Indian Country, we need infrastructure. 
That is what I am worried about. If we do not have 
infrastructure and commitment to build infrastructure, we will 
continue to experience incredible rates of tribal poverty.
    I know the commitment that has been made by this 
Administration but know our frustration. I am out of time but I 
want to continue and hopefully we will be able to get some good 
ideas from the housing summit.
    I think curb and gutter, those kinds of things, the 
embedded costs, if we did not have to worry about the road, the 
sewer, the water, and all of the additional costs and just 
focus on actually building the home, we would be so much 
farther ahead in home ownership.
    These are difficult problems. We know what a great partner, 
in many cases, USDA has been. We are hoping that we can enlist 
even further partnership.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Heitkamp.
    Senator Moran.
    Senator Moran. Mr. Chairman, thank you very much.
    Ms. Salerno, we have had conversations with our four tribes 
in Kansas about this topic and have reached out as well to our 
Topeka Rural Development office. I was generally pleased to 
learn that our tribes believe that the Rural Development State 
officials are doing a good job and have highlighted for me a 
number of projects in which they have been involved, all of 
which seem very useful and appropriate.
    In fact, one of our tribes indicated their experience with 
Rural Development in Topeka was wonderful. Perhaps as part of 
this conversation about outreach, it may be a State focus issue 
as well as what happens here in the Nation's capital, how much 
outreach is occurring by the State Director.
    Noting that relationship that was described to me, I would 
ask this question. How does USDA go about coordinating between 
Rural Development offices and in the bigger picture of 
promoting this nationwide? Is there flexibility at home in 
Kansas and other States or is this Washington, D.C.-driven?
    Ms Salerno. That is such a good question.
    You know our State director in Kansas, Patty Clark, who has 
done an amazing job. We give a lot of authority to the States. 
All the programs are not decided in Washington, D.C. The State 
directors do have a lot of influence in how the outreach and 
dollars go out.
    Probably part of what we see in some of these big 
geographic Plains States where the geographies are so big, when 
you look at FTEs, it is about population. Some of the big 
Plains States, and certainly a place like Alaska, huge 
territories where we do not have enough personnel, I think that 
might be some of our challenge. We need to figure out ways to 
address those.
    Senator Moran. That point was somewhat evident to me 
because our four tribes are generally located around the State 
capital, Topeka, where RD is headquartered. The outreach would 
be much simpler, and Alaska is a good example, but even in our 
own State, if the tribes were elsewhere, I would not be 
surprised that there is less outreach.
    Senator Heitkamp and I worked to pass legislation generally 
referred to as the General Welfare Exclusion Act, not that you 
should know anything about that in your job at USDA. It 
involves the relationship between tribes and the Internal 
Revenue Service. The constant concern, and there was plenty of 
evidence before and after passage of the legislation, is that 
the IRS agents were not at all properly trained in interacting 
with tribes, in understanding tribes and understanding the 
culture and the governance.
    I just would give you the opportunity to elaborate, if you 
could, to explain that there is an effort at USDA Rural 
Development to do something different than what my experience 
has been with IRS agents.
    Ms. Salerno. We have an Office of Tribal Relations that is 
our face to tribes and it counsels us and makes sure that our 
programs are sensitive to the cultures maybe loan specialists 
serving a tribe may not know.
    We also have a working group for everything tribes within 
USDA. We have an office that coordinates throughout the Federal 
family. I am sure we can do better.
    Senator Moran. Let me ask this question. You indicated that 
effort is made to educate. Would the folks I know in my Rural 
Development office in Topeka have had specific training through 
USDA with regard to issues in dealing with tribes, not just the 
programmatic issues but the more perhaps subtle issues of 
culture, relationships and governance or do we wing that? Maybe 
Kansans just figure this out on their own, how to relate to 
each other.
    Ms. Salerno. It is all collateral duties. We have someone 
named as the Native American Coordinator in every State. That 
person may also be wearing the hat of the strike force 
coordinator, civil rights or administrative officers. It may be 
where that person cannot spend more than 20 percent of their 
time as Native American Coordinator.
    The more our personnel are trained by having interaction 
with tribes, one of the things we know and have learned is it 
is about relationships. I think the point of my colleagues 
here, that we have lost staff, so we probably have lost long 
term relationships with tribes.
    I think this does give us another opportunity to make sure 
with the new folks Congress has given us the opportunity to 
hire, making sure we get them up to speed on outreach. I just 
could not speak to whether those particular people were 
trained.
    Senator Moran. Thank you for your testimony. Thank you to 
both of the gentleman for their testimony also. I knew you 
would find an opportunity to suggest more staffing and 
therefore, more appropriations were valuable.
    The Chairman. Thank you, Senator Moran.
    Senator Franken.

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

    Senator Franken. Thank you, Mr. Chairman, for holding this 
important hearing.
    I am going to touch on Mr. Haugen's testimony and Senator 
Heitkamp's discussion about housing.
    As of 2015, children represented just under 40 percent of 
the homeless population living on reservations in Minnesota. 
Additionally, almost half our homeless population on 
reservations has been waiting over a year for housing support.
    In the meantime, 74 percent of them are living in 
overcrowded spaces. Very often, as you know, this can be with 
another family in small living spaces. This can cause concerns 
about safety, communicable diseases, also increased trauma, 
exposure to domestic violence, drug use, alcohol abuse, and 
sexual abuse. These can have a dramatic impact on children.
    A 2012 report by Wilder Research said that overcrowded 
housing can, speaking about children, ``threaten their 
educational success, health and mental health and personal 
development.'' This problem is not confined, of course, to 
Minnesota or to one tribe. A disproportionate number of homes 
on tribal lands are inadequate, overcrowded or unaffordable.
    Mr. Haugen, you touched on this a lot in your testimony and 
talked about NAHASDA needing USDA support. In your experience, 
how have USDA's housing programs been successful and what else 
can USDA be doing in regard to housing issues in Indian 
Country?
    Mr. Haugen. I guess, in my own opinion, what is lacking at 
home is the fact that we do not meet the requirements of some 
of these housing programs as tribes with regard to a tax base, 
bonds, stuff like that. We do not have that on the reservation, 
so automatically we are kicked out from even applying for this 
program or that program.
    There are so many programs they offer. So we have asked 
over and over, as Ms. Salerno alluded, the State director has 
told me personally that he has the authority to waive certain 
restrictions with these programs. Why that has not happened in 
the past, we do not know but we are hoping. Ironically, I met 
with our State Director, John Walsh, on Monday.
    Senator Franken. The State Director of USDA?
    Mr. Haugen. Yes. I am willing to do anything we need to do 
to make a better relationship with all the tribes, so fingers 
are crossed. I am sure Mr. Walsh will keep his word. I think 
something as simple as just having the authority to waive some 
of these things so we can make this happen is what is needed.
    Senator Franken. Do the State directors have that 
authority, Ms. Salerno?
    Ms. Salerno. I am not certain. I really appreciate the 
sentiment around the homeless piece. It is heartbreaking. USDA 
is a member of the U.S. Interagency Council on Homelessness. I 
read those reports and the numbers are just unbelievable. I do 
not know about that authority specifically.
    Senator Franken. Can you get back to us on that?
    Ms. Salerno. Absolutely, I will do that. I just wanted to 
let you know that we are looking for creative solutions.
    Senator Franken. That sounds like a pretty good creative 
solution.
    Ms. Salerno. I just would not speak without knowing that is 
something we are prevented from doing by our statutes and our 
regulations.
    One thing we are doing is we are partnering with the 
Federal Reserve Bank of Minneapolis, the Federal Reserve Bank 
of San Francisco and Neighbor Works to have a convening, in 
Arizona, to bring in a bunch of smart people around the table 
to figure out if there are partnerships we need to lean on to 
try to help craft some solutions. We have been working on this. 
We will get back to you with what we come up with.
    Senator Franken. Please do because if that is the case, 
then that seems to be one avenue for some creative solutions.
    I am out of time, Mr. Chairman. May I say a little more?
    The Chairman. Please do.
    Senator Franken. When there are housing shortages, that 
makes it harder for a tribe to recruit people for law 
enforcement, teachers, principals, and health care folks 
because someone will be coming in and the spouse will go, what 
is the housing going to be like?
    If you are a doctor and the housing is not good, maybe you 
will not go. If you are a teacher and the housing is not good, 
the Indian Health Service is not so good because they cannot 
attract doctors, you may not want to go as a teacher.
    This is part of the cyclical problem. Part of that is 
economic development. That is why I got into Energy and Water 
Appropriations. I want to thank the Chairman for helping on 
that to get just a $9 million loan program that can be 
leveraged to do like $85 million worth of projects.
    We need more economic development. We also need more money 
for housing and infrastructure.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Franken.
    Senator Hoeven.

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

    Senator Hoeven. Thank you, Mr. Chairman.
    Ms. Salerno, I want to direct my questions to you. I thank 
all the witnesses for being here.
    Recently, the Turtle Mountain Band of Chippewa Indians in 
my State was designated as the pride of the Great Plains 
Promise Zone. They are also collaborating with Spirit Lake 
Nation which is in the Devils Lake area. We are excited about 
that.
    I guess I would like to discuss with you the Promise Zone, 
a little bit in terms of how it works and how you think it can 
be effective, what we can do, maybe some examples of things 
that have been done in other places that have worked well and 
maybe how we want to market and get the word out, those kinds 
of things.
    Ms. Salerno. I am very excited about the designation in 
your State. We have had some experience. The Promise Zone is 
just that, a promise without money but it is a ten year 
commitment. In the past the Federal family did not always work 
well together; we are going to put navigators, like a desk 
officer, a point of contact, in a distressed area.
    We are going to make it so that when a tribe or a 
community, the designees, need something, that they get to know 
about every grant we can locate that they could possibly have 
an opportunity to apply for, loan or partnership opportunity 
and make sure that we do sort of intensive care for that area.
    USDA leads the Promise Zone efforts for rural and tribal 
areas. Our experience has been with the two prior designees 
which are Choctaw Nation in Oklahoma and Pine Ridge Reservation 
in South Dakota.
    Just so you have some numbers, since the designations 
occurred for Pine Ridge, there has been $20 million of 
investment into Pine Ridge. That is just out of the USDA 
family. For Choctaw Nation, there is approximately $100 million 
that has gone there.
    Real numbers come, but a lot of that is because there are 
folks there who can help access the Federal Government by 
writing planning documents, charting that path and taking 
assessment of, in this case, the Turtle Mountain part of the 
application which was an excellent application. It is about 
making sure they take advantage of some of the great food 
economy and other things.
    We have designated a local point of contact and a desk 
officer here in Washington. And there is an excellent Rural 
Development State Director Ryan Taylor who will play a major 
part as well as the NRCS State conservation person. Those 
meetings are happening already.
    There is lots of activity with all the Federal family 
trying to make sure any resources are made available. We are so 
excited about these two new designations and we will now have 
four examples where the Federal family really worked well 
together.
    It is not that we do not work well together. It is just 
real intentional for these Promise Zones to have something that 
we can use these best practices for all tribes.
    Senator Hoeven. Is it the navigators that actually go to 
the reservation and work to access some of those Federal 
programs when you talk about the $20 million for Pine Ridge or 
the $100 million for Choctaw Nation?
    Ms. Salerno. Any of the applications for grants or loans, 
because it is a Promise Zone designation get priority points 
from the Federal family. That is why they are elevated. That is 
why their chances of getting Federal funds go up.
    Senator Hoeven. Are there tax credits that go with it or 
tax benefits for companies that will locate there and hire 
people?
    Ms. Salerno. Not at this time.
    Senator Hoeven. It is primarily accessing Federal programs 
for help?
    Ms. Salerno. We have that because the Federal Government 
has gone there first, other folks come in. For example, for 
Choctaw Nation, more lenders are coming in which is part of the 
public-private partnership.
    Senator Hoeven. Can you give me an example of any of the 
things they have done that have been particularly successful or 
things we maybe should look at?
    Ms. Salerno. For example, in Choctaw Nation, they were able 
to get RD money for a community facility. For the Choctaw 
Nation, which is in Oklahoma, they were able to put together a 
community center which was a Head Start, food distribution and 
wellness center altogether. These facilities were funded by 
both USDA and HHS. Because it had the Promise Zone designation, 
this created about $93 million of Federal investments. Also 
there was some kind of banking relationship but I will have to 
get you more information on that. That was a $93 million 
investment.
    Senator Hoeven. It is up to the tribe and their navigator 
to come up with these ideas in terms of what they want to do 
and what programs to access?
    Ms. Salerno. When the tribes submitted their applications, 
they worked really hard, the applicant, to put together how 
they would use this designation by building out economic 
opportunities and economic development.
    Senator Hoeven. Thank you very much.
    The Chairman. Thank you, Senator Hoeven.
    Ms. Salerno, in 2010, the USDA settled a class action 
lawsuit filed by a group of Native American farmers and 
ranchers alleging some discriminatory practices by the Farm 
Service Agency within USDA in its issuance of various farm 
loans to the Keepseagle litigation.
    I understand these loans involved in the class action 
involved the Farm Service Agency and not Rural Development. The 
type of discriminatory practice can cause some distrust of the 
agency as a whole.
    When compared to the Farm Service Agency, Rural Development 
administers a similar set of financing instruments through 
their loan, loan guarantee and grants portfolio. Has the Rural 
Development branch taken steps to market the programs and 
conduct outreach in such a way as to eliminate any types of 
discriminatory practices that tribal farmers and ranchers faced 
in the past?
    Ms. Salerno. The Keepseagle litigation was the tribal 
litigation. The Farm Service Agency was the agency involved. We 
are one USDA. Rural Development and all the sister agencies are 
all committed to serving Native Americans.
    In our Rural Development mission, we are very cognizant and 
work closely with our Office of Tribal Relations, our Native 
American coordinators, our State directors and those States 
that have tribes are committed to serving Native Americans.
    We host webinars, we go to conferences, take the lead from 
the Office of Tribal Relations, a robust and active 
organization, where they train us on how to deal with tribes. 
We are doing that at this time.
    The Chairman. Your testimony outlined all the different 
ways the USDA is getting funding into tribal communities. In 
the tribal communities that have successfully navigated the 
bureaucratic nightmare, assistance programs kind of tell the 
story.
    From your own Under Secretary testimony, less than 1 
percent of the rural tribal housing funds allocated by the USDA 
are actually reaching the tribes. Do you have any metrics you 
use in terms of trying to identify even if those efforts are 
working to get the outreach when you take a look at these kinds 
of numbers?
    Ms. Salerno. That is a very good question. One thing is the 
outreach. Another thing is about the uptick in the programs. We 
certainly keep track of how many tribes we speak with. We 
encourage our outreach staff as well as our Office of Tribal 
Relations which is our lead on that, but there is a lot of 
outreach.
    I do not think the outreach is representative. The outreach 
is amazing. I think the uptick on housing is not amazing. That 
is what we are speaking about today. We need to do better. I 
think that has to do with the back end which has to do with 
trust lands and other issues that we need to resolve.
    The Chairman. Mr. Schuerch, you and Senator Murkowski 
mentioned 2012, when the USDA closed a number of rural offices 
in Alaska that did provide some of this outreach. You discussed 
in your written testimony the need for the USDA to continue 
implementing the tribal consultation policy in a consistent 
manner.
    What type of consultation did USDA provide before they 
closed down the rural offices? Could you kind of run through 
what they were doing, helping and providing in terms of the 
outreach?
    Mr. Schuerch. Outreach was better. Now they work primarily 
out of their Palmer office which is sort of a centralized 
location in Alaska in terms of reaching out to us. It is pretty 
good. They come up maybe two or three times a year. We know who 
they are. They have community meetings in Kotzebue at least. In 
general, we know who they are; they come and talk to us.
    The real challenge right now is at the local level. Our 
local tribes, tribal members, and our tribally-owned businesses 
do not necessarily know what all the USDA programs are right 
now. That, in my view, is where the real need is right now.
    We need at least one energetic, knowledgeable person from 
the USDA or somehow partially funded by the USDA, to go to work 
every day and help our tribes, our tribal members, our 
tribally-owned businesses, and local businesses learn about 
their programs and what they can do to participate in the 
programs to benefit their business, their tribes and the 
economy as a whole.
    Despite the successes of the RAVG and some other programs, 
that is the missing piece right now, the local, on-the-ground 
presence. That is what we need.
    The Chairman. Thank you. I want to thank all of you for 
being here today and answering the questions.
    As you know, members may also submit written follow-up 
questions. The hearing record will stay open for another two 
weeks.
    I want to thank all of you for your time and your 
testimony. The hearing is adjourned.
    [Whereupon, at 3:48 p.m., the Committee was adjourned.]

                            A P P E N D I X

 Prepared Statement of Tanya Fiddler, Executive Director, Native CDFI 
                                Network
    First, I want to commend the Committee for convening a hearing to 
discuss how Native communities can access and take full advantage of 
the housing and community development programs administered by the 
United States Department of Agriculture (USDA) and I appreciate the 
opportunity to weigh in on behalf of NCN and our members.
Background
    Let me start by providing some background. Community Development 
Financial Institutions (CDFIs) are private, mission driven financial 
institutions dedicated to providing financial products and services to 
underserved communities. The origin of Native CDFIs can be traced back 
to 1994 when Congress mandated, through the CDFI Fund's authorizing 
statute, a study on the lending and investment practices in Native 
Communities. The Native American Lending Study (NALS), released in 
2001, revealed that Native American, Native Alaskan, and Native 
Hawaiian communities face unique challenges to economic growth. These 
obstacles include heightened barriers to accessing capital and basic 
financial services, as well as increased difficultly interacting with 
both private and public sector programs. With this in mind, the CDFI 
Fund created the Native Initiatives to further support the creation and 
expansion of Native CDFIs--CDFIs committed to empowering Native 
Communities and increasing access to credit, capital, and financial 
services.
    Since the launch of the Native Initiative the number of certified 
Native CDFIs has grown from seven to over seventy with additional 
organizations currently working through the certification process. 
These Native CDFIs are Native owned businesses, providing financial 
services and counselling, and expanding affordable housing 
opportunities that benefit Tribal communities. In FY 2015 alone, Native 
CDFIs originated $68 million in loans or investments that resulted in 
thousands of first time homeowners, jobs and businesses across the 
nation, and a culturally appropriate development model for increased 
success and sustainability.
    The Native CDFI Network was created in 2009 to be a unified voice 
and advocate for Native CDFIs and to promote strategies that empower 
Native Communities, expand access to capital, and build assets. As a 
co-founder of the Network, it was top priority to learn about the state 
and federal programs that supported community and economic development. 
We learned that Native set-aside money was getting turned back to the 
National pool due to low demand and in spite of our Tribes' always 
being in pursuit of economic development dollars for their struggling 
communities.
    We pursued meetings with our state USDA Rural Development staff in 
South Dakota and Agency staff in DC to open up communication about how 
Native CDFIs were able to serve reservation communities and begin the 
development of a private sector economy. My first experience with USDA 
Rural Development programs was in 1997 as a Section 502 Packager 
working for a Native Housing Developer on my home reservation of 
Cheyenne River in North Central South Dakota. Working with that non-
profit housing developer, I began to learn how to overcome barriers and 
challenges in accessing RD funding. With little or no private 
investment in our reservation community, it was critical to innovate 
and think outside of the box. To that end, we were able to couple Low 
Income Housing Tax Credits with Section 515 for a number of single 
family housing projects and rental housing projects. When I 
transitioned to run Four Bands Community Fund, a Native CDFI located on 
Cheyenne River as well, we had great success accessing what was then 
the Rural Business Enterprise Grant (RBEG) and Rural Business 
Opportunity Grant (RBOG) which provided capacity building for the new 
Native entrepreneurs we were assisting. The Cheyenne River Chamber of 
Commerce received support as well since it did workforce and sector 
development to support job creation. Four Bands eventually matured to 
apply for the Rural Microenterprise Assistance Program loan funds and 
the Intermediary Relending Program for capitalization. They have 
deployed millions of dollars in loans for the housing and business 
development that is needed to grow an economy.
    While we celebrate the successes of our Native CDFIs and the great 
strides made over the last 15 years it is important to note that the 
barriers to capital that were identified in 2001 still exist in 2016. 
Native CDFIs have developed creative strategies for overcoming these 
barriers but it is important to recognize that Native Communities still 
face significant and unique challenges accessing capital. Last month, 
the CDFI Fund released a new report, Access to Capital and Credit in 
Native Communities, as a follow up to the 2001 NALS study. While the 
NALS focused on barriers, the new study focuses on change and 
opportunity and suggests successful strategies that Native Communities 
have used to overcome barriers and access capital and credit.
    The report recognizes the important role that Native CDFIs can play 
in building and sustaining Native Communities and ensure that community 
development efforts are in-line with and reflect the principles and 
value of the Native Community. The report recognizes that Native CDFIs 
can provide access to capital and credit for Native individuals who, 
prior to the development of a local CDFI, were unable to finance a home 
or a business or save for their education.
    One of the many lessons that I took away from my nearly twenty-
years utilizing USDA funding, and is further underscored in the updated 
Access to Capital and Credit Report, was the transformational power of 
Native CDFI partnerships and our commitment to overcoming barriers that 
limit homeownership opportunities in Native communities, or suppress 
job creation and discourage entrepreneurship, or discourage saving and 
asset building. USDA Rural Development is an important partner for 
Indian country and I would like to suggest several ways that Native 
CDFIs and USDA can work together to increase investment in Native 
Communities.

        1.  Promote the success of Native CDFI and USDA State 
        partnerships that have expanded access to credit, skill-
        building and business development in order to create livable 
        wage jobs in Native Communities and affordable homeownership 
        opportunities.

          a.  An example of a successful partnership is that between 
        Mazaska Owecaso Otipi Financial, a Native Housing CDFI on the 
        Pine Ridge Reservation that offers flexible loan products to 
        support home ownership and rehabilitation for low- to moderate-
        income families. Opportunities for Native homeownership were 
        few and far between before the Native CDFI began serving the 
        community. Mazaska worked with South Dakota's USDA Office to 
        enter into a first of its kind, participation agreement to help 
        expand the limited dollars available within both agencies and 
        allow for the flexible underwriting that is required since most 
        Native families are asset poor. They continued their 
        partnership in a collaboration called the SD Native 
        Homeownership Coalition and structured a capitalization pilot 
        that would deploy Section 502 dollars to the Native CDFI in 
        order to increase the dismally low numbers of this important 
        low income resource.

        2.  Work with National Partners like the Native CDFI Network to 
        outreach and, promote the availability of funds and best 
        practices for community and economic development in order to 
        expand access to capital and uptake to critical programs, no 
        longer losing Native set-aside dollars that are so challenging 
        to get in the first place.

          a.  In May 2016, the Native CDFI Network and the USDA Office 
        in Washington partnered to provide a webinar regarding 
        community facilities funding opportunities. Director Mensah and 
        her staff were on the call to share the Agencies objectives in 
        meeting the needs of rural Native communities. The Staff were 
        exceptionally helpful in providing immediate technical 
        assistance and guidance on the program. In a time when budgets 
        are tight for all public and private entities, distance 
        learning, webinars and other networking opportunities can 
        deeply impact Native CDFIs operations and financing.

        3.  Continue to reach out to Native CDFIs to provide education 
        to policy makers and key stakeholders on specific barriers to 
        economic development and asset building in Native communities 
        in order to identify alternative strategies, programmatic or 
        legislative, that will ensure an opportunity for safe and 
        prosperous communities throughout our underserved communities. 
        Native CDFIs will demonstrate the impact and sustainability of 
        housing and community development when people have access to 
        capital, training and technical assistance to accomplish their 
        asset building goals.

    I deeply appreciate the opportunity to provide input into the 
hearing record on behalf of the Native CDFI field, partners and Native 
communities.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. John McCain to 
                            Lillian Salerno
    Question. What is the status of the Navajo's application for the 
Promise Zone designation? Are you familiar with the Bennett Freeze Area 
and would you agree that a Promise Zone designation could improve the 
housing and economic situation in the former Bennett Freeze area?
    Answer. Although the Navajo Nation did not receive a Promise Zone 
designation, they were a finalist in the last round and it is USDA 
Rural Development's intent to find additional ways to assist the Navajo 
Nation. Rural Development staff have hosted ongoing discussions with 
the Navajo Nation and Navajo Technical University (the lead Promise 
Zone applicant on behalf of the Navajo Nation) to further prioritize 
and implement plans articulated in the PZ application. Discussions are 
well underway with the Navajo Nation, Navajo Tech and the Casey Family 
Foundation to host a Navajo Nation Promise Zone convening at Navajo 
Tech in late September. Additionally, work is under way between Rural 
Development, the Corporation for National and Community Service, the 
Navajo Nation and Navajo Tech to recruit and deploy an AmeriCorps/VISTA 
volunteer to serve as dedicated staff to assist the Navajo Nation 
navigate and compete for federal programs.
    Rural Development staff in Arizona and New Mexico are certainly 
aware of the infrastructure, housing and economic development 
challenges within the former Bennett Freeze area. RD Arizona has made a 
concerted effort to increase 504 home repair assistance (loans and 
grants) to homeowners in the Bennett Freeze area. Rural Development 
staff will continue to be responsive to the needs within the Bennett 
Freeze area as they are presented by the Navajo Nation and Navajo 
Tech--both within the Promise Zone framework and in ongoing project 
development.
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