[Senate Hearing 114-538]
[From the U.S. Government Publishing Office]
S. Hrg. 114-538
S. 2285, S. 3234, S. 3261, AND H.R. 4685
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HEARING
BEFORE THE
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 7, 2016
__________
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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
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Page
Hearing held on September 7, 2016................................ 1
Statement of Senator Barrasso.................................... 1
Statement of Senator Burr........................................ 5
Statement of Senator Daines...................................... 4
Statement of Senator Heitkamp.................................... 31
Statement of Senator Hoeven...................................... 5
Statement of Senator Tester...................................... 2
Statement of Senator Udall....................................... 4
Witnesses
Andrews-Maltais, Cheryl, Senior Policy Advisor to the Acting
Assistant Secretary on Indian Affairs, U.S. Department of the
Interior....................................................... 7
Prepared statement........................................... 9
Godwin, Jr., Hon. Harvey, Chairman, Lumbee Tribe of North
Carolina....................................................... 13
Prepared statement........................................... 15
McDarment, Hon. Kenneth, Vice Chairman, Tule River Indian Tribe.. 17
Prepared statement........................................... 18
Watchman, Derrick, Chairman, National Center for American Indian
Enterprise Development......................................... 21
Prepared statement........................................... 22
Appendix
McCaleb, Neal, Ambassador at Large, Chickasaw Nation, prepared
statement...................................................... 39
Response to written questions submitted by Hon. Al Franken to
Derrick Watchman............................................... 46
Smith, Leonard, Executive Director, Native American Development
Corporation (NADC), prepared statement......................... 39
Snell, William, Executive Director, Rocky Mountain Tribal Leaders
Council, prepared statement.................................... 42
United South and Eastern Tribes Sovereignty Protection Fund,
prepared statement............................................. 43
S. 2285, S. 3234, S. 3261, AND H.R. 4685
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WEDNESDAY, SEPTEMBER 7, 2016
U.S. Senate,
Committee on Indian Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 2:50 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 legislative
hearing to order.
Today the Committee will examine four bills: S. 2285, the
Lumbee Recognition Act; S. 3234, the Indian Community Economic
Enhancement Act of 2016; S. 3261, the Native American Business
Incubators Program Act; and H.R. 4685, the Tule River Indian
Reservation Land Trust, Health and Economic Development Act.
The bill S. 2285, the Lumbee Recognition act, was
introduced on November 7th, 2015, by Senator Burr. On June 7th,
of 1956, Congress passed the Lumbee Act which designated
certain Indians to be Lumbee Indians of North Carolina, but did
not identify them as a federally-recognized tribe. The 1956 Act
did not provide the Lumbee Indians eligibility for Federal
services, which the United States provided to recognized Indian
tribes because of their special status as an Indian tribe.
Since the passage of that 1956 Act, Congressional actions
have been sought to remove the prohibition from accessing
Federal Indian programs. This Committee has held several
hearings on the status of the Lumbee Indians during which
differing views on prior legislation have been considered. We
will now hear this bill address these views in light of the
1956 Act. I will turn to Senator Burr in a moment, who has
joined us today for any comments he would like to make.
On July 14th of 2016, I introduced S. 3234, the Indian
Community and Economic Enhancement Act of 2016, along with
Senator McCain. During this Congress, the Committee held a
series of hearings, roundtables and listening sessions to
examine how to develop Indian communities' economies. Access to
capital was one of the key challenges and public priorities
identified, and the top priorities identified by Indian tribes,
by business leaders and by entrepreneurs.
This bill is intended to do three things: Increase access
to capital for Indian tribes and businesses; to increase
opportunities for Indian business promotion; and to create
mechanisms and tools to attract business to Indian communities.
Since the bill's introduction, my staff has been engaged in
discussions with affected agencies, tribes, business
organizations and business owners. We have received
considerable positive feedback and look forward to addressing
the recommendations received over the past recess as well as at
today's hearing. This bill will assist Indian businesses and
communities in developing sustainable economies and jobs.
I look forward to moving this bill expeditiously through
Congress.
I also want to take a moment to thank Gary Davis, the
outgoing President of the National Center for American Indian
Enterprise, for the work he and the National Center have done
on this bill and for Indian economies. Both he and Mr. Derrick
Watchman, the Chairman of the National Center Board, who is
testifying here today, have testified before this Committee.
They have provided substantial input in support of this bill
and the Indian Energy Act, S. 209.
So I appreciate your work and ask that you, Mr. Watchman,
will send the Committee's gratitude and best wishes to Gary in
his new adventures. Thank you.
On July 14th of 2016, Vice Chairman Tester introduced S.
3261, the Native American Business Incubators Program Act,
along with Senators Cantwell and Udall. This bill develops a
program for physical workspaces, or incubators, to develop
Native business and Native entrepreneurs.
I will turn to Senator Tester in a moment to talk about his
bill.
On March 3rd, 2016, Representative McCarthy introduced H.R.
4685, the Tule River Indian Reservation Land Trust, Health and
Economic Development Act. This bill passed the House of
Representatives on July 5th of this year. H.R. 4685 would take
34 acres of Federal land located in Tulare County, California,
and to trust for the benefit of the Tule River Indian Tribe.
I would like to turn to Vice Chairman Tester at this point
for any opening statement.
STATEMENT OF HON. JON TESTER,
U.S. SENATOR FROM MONTANA
Senator Tester. Thank you, Mr. Chairman, for holding this
hearing to consider important legislation for this Committee. A
special welcome to Senator Burr, and appreciation for his
leadership on Lumbee Recognition.
One of the bills that we are going to hear today is S.
3261, the Native American Business Incubators Program Act,
which I introduced with my colleagues Senators Cantwell and
Udall. This bill will help promote tribal economic development
by investing in small business where it is needed, on the
reservation. This Committee has heard from tribal leaders about
many factors that prevent economic growth in tribal
communities. They include a complicated regulatory environment
unique to Indian Country, capacity issues and problems
accessing capital, and attracting good business partners.
These issues translate into fewer on-reservation
businesses, fewer jobs in tribal communities, and Native youth
having to leave home in search of opportunities elsewhere. This
bill will help address these issues by providing resources to
establish business incubators that serve Native entrepreneurs
in tribal communities. Each business incubator will be a one-
stop shop that helps Native entrepreneurs navigate both typical
obstacles of starting a business as well as those obstacles
that make doing business in Indian Country unique.
The bill would do this by ensuring that each incubator has
quality staff members that are experts in conducting business
in Indian Country. Additionally, it would require incubators to
ensure Native entrepreneurs have access to resources necessary
for the business to thrive, such as connected workspaces,
business skills, training, mentorship opportunities and access
to professional networks.
S. 3261 would also ensure that incubator programs
complement other resources available to tribes. The bill would
require the Secretary of Interior to coordinate with heads of
other Federal agencies, so each incubator is equipped to
provide assistance to Native entrepreneurs that want to utilize
Federal business development programs at those agencies.
The bill also calls on the Secretary to set up a pipeline
program between education institutions and business incubators
to encourage entrepreneurship among Native youth.
I also want to talk briefly about the Tribal Recognition,
since we are also considering the Lumbee bill here today. As
you all know, I introduced, along with Senator Daines as a co-
sponsor, the Little Shell Recognition Bill. This issue is very
important to me and to Senator Daines. While I am interested in
the discussion we are having today, I do hope that we can get
the Little Shell Recognition Bill across the finish line.
We don't always agree on a lot of things around here. But
when there is bipartisan support for a bill like there is with
the Little Shell, it would be great to get it done.
Finally, I want to acknowledge Mr. Bill Snell for his great
work with Native American communities with the Rocky Mountain
Tribal Leaders Council. He was scheduled to testify before us
today, but unfortunately due to an illness, had to cancel his
trip and could not make it. He has submitted a statement, which
I would ask unanimous consent be part of the record.
With that, once again, thank you, Mr. Chairman. I look
forward to hearing from the witnesses today.
The Chairman. Thank you, and without objection, that full
statement will be made part of the record.
The Chairman. Any other members who would like to make an
opening statement? Senator Daines.
STATEMENT OF HON. STEVE DAINES,
U.S. SENATOR FROM MONTANA
Senator Daines. Thanks, Mr. Chairman. I want to start by
wishing a warm welcome to Tafuna Tusi, Financial Management
Officer of the Rocky Mountain Tribal Leaders Council who is
here from Billings, Montana. It is good to see you here in
D.C., Mr. Tusi.
Montana is home to four Native Community Development
Financial Institutions. I had the pleasure of joining one of
them, the Native American Development Corporation, at the
conference back home in Montana just last month. These
organizations are key to increasing Native access to capital in
our Native communities, and I am glad we are visiting ways to
more effectively provide credit solutions in Indian Country.
I would like to point out an example of success. So often
around this table we seem to talk about failures. There is a
success. The Crow Nation was the first tribe in the Country to
enact the Model Tribal Secured Transaction Act, and was also
the first to enter into a formal Uniform Commercial Code filing
system agreement under a tribal transaction law. This historic
compact is helping facilitate lending at economic development
on the Crow Reservation there near Hardin, Montana.
Congress, the Administration and tribes must continue
working together so we can replicate that success on other
reservations in Montana and across our entire Country. Enacting
legislation that fosters the creation of these good, high-
paying jobs is absolutely key to Native nations' success and
their long-term prosperity.
I appreciate the work my colleagues have done on this,
particularly Chairman Barrasso, as well as Vice Chairman
Tester. They have gone before us, they brought this before us
for consideration, and I look forward to today's discussion.
Thanks, Mr. Chairman.
The Chairman. Senator Udall?
STATEMENT OF HON. TOM UDALL,
U.S. SENATOR FROM NEW MEXICO
Senator Udall. Thank you, Mr. Chairman.
Good afternoon, Mr. Chairman and Vice Chairman. I am
pleased to see that S. 3261, the Native American Business
Incubators Program Act, is on today's legislative hearing.
Spurring economic development in Indian Country is a critically
important issue.
According to the National Congress of American Indians, 39
percent of Native Americans living on reservations are in
poverty and the unemployment rate is 19 percent, more than
three times the national average. It goes without saying that
we need to do everything we can to improve opportunity for
Indian Country. I am pleased to have joined Senators Tester and
Cantwell in sponsoring S. 3261 to help establish and maintain
business incubators to serve Native American communities. The
bill will help Native American business owners navigate
obstacles, cut through the red tape and get access to start-up
funding. These important tools will help promising
entrepreneurs get off on the right foot, so they can launch
their businesses and stay in business.
Thank you again. I look forward to hearing from the
witnesses today.
The Chairman. Thank you, Senator. Senator Hoeven?
STATEMENT OF HON. JOHN HOEVEN,
U.S. SENATOR FROM NORTH DAKOTA
Senator Hoeven. I am pleased to be here to discuss the
merits of these bills, particularly S. 3234, which is the
Indian Community Economic Enhancement Act and S. 3261, the
Native American Business Incubators Program.
In North Dakota, we have reservations with thousands of
Native American-owned businesses that are pleased with what
they are doing. They are encouraged and want to continue to
promote further economic development efforts for these small
businesses, which are vital to their communities and their
reservations. So I very much look forward to hearing from this
panel in regard to the legislation that we are proposing here,
and also other ideas that you have to help small businesses on
the reservation.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Hoeven.
Before turning to Senator Burr, would any other members
like to make an opening statement? If not, Senator Burr,
welcome to the Committee.
STATEMENT OF HON. RICHARD BURR,
U.S. SENATOR FROM NORTH CAROLINA
Senator Burr. Mr. Chairman and Mr. Vice Chairman, thank
you; thank you, colleagues for the Committee's time and for
your efforts regarding Federal recognition for the Lumbee
Tribe.
I would also like to thank my North Carolina colleagues,
Representatives Hudson and Butterfield, for their passion and
dedication on this issue. Mr. Chairman, it is good to see the
frugality of the Indian Affairs Committee. They have left my
name tag over from when I served on the Committee, I think,
unless you hunted this down somewhere.
I would also like to thank Chairman Harvey Godwin. He was
sworn in as chairman earlier this year, for traveling up from
North Carolina for this hearing. I welcome him and his son,
Quinn, who is here with him today, to Washington. Chairman
Godwin brings with him over 20 years of business experience and
a long history of public service to his community. He has been
a proven leader in Robeson County. I know he will bring that
same work ethic and integrity to the Lumbee Tribal Council and
the Tribe.
Mr. Chairman, for more than a century, the Lumbees have
been recognized as an American Indian. North Carolina
recognized the tribe in 1885 and the tribe began their quest
for Federal recognition three years later, in 1888. The Lumbees
are in a unique situation. They are the largest Indian tribe
east of the Mississippi, with a membership of over 34,000. Yet,
they have remained unrecognized for over a century.
The Lumbee Act of 1956 designated the Indians designating
in Robeson County and adjoining counties of North Carolina as
the Lumbee Indians of North Carolina. That also inexplicably
prevented the Lumbees from being eligible for any services
provided by the Federal Government or any benefits that are
provided to other tribes.
While the Lumbee Act somewhat recognized the tribe, it was
strictly conditional. This 1950s-era law specifically blocked
Federal assistance to the Lumbee Tribe. It is nothing short of
discrimination. And decades of discrimination against the
Lumbees have resulted in severe economic and societal
consequences for the Lumbee people.
Robeson County is one of the ten poorest counties in the
United States of America. The 1956 law has put them on an
unequal footing, compared to other federally-recognized tribes.
And it has prevented them from obtaining access to critical
services through the Bureau of Indian Affairs and the Indian
Health Service. This is simply unjust and immoral.
When the Bureau of Indian Affairs established its process
for formal recognition in 1970, the Lumbees were once again
denied equal treatment and barred from participating, due to
the 1956 Lumbee Act. They were denied a third time in 1989,
when the Department of Interior determined that the Lumbee Act
of 1956 prohibits the Tribe from going through the BIA process,
and the only way for a tribe to obtain full Federal recognition
would be by an act of Congress.
Therein lies the reason I am before you today. The BIA's
process is reserved for tribes whose legitimacy must be
established. As we know, and when you hear from Chairman Godwin
today, the Lumbees have established legitimacy time and time
again. The Lumbees have been part of eastern North Carolina's
history for centuries. Like Chairman Godwin, they serve their
community effectively and tirelessly. They have been teachers,
farmers, doctors, small business owners, lawyers. Some have
served as sheriffs, clerks of court, State legislators and
judges. Many have protected our Nation by serving in the United
States armed forces. The contributions they have made to their
local communities and the State of North Carolina have not gone
unrecognized or unappreciated.
The question I want the Committee to ask themselves today
is, how can this federally-recognized tribe be denied the
benefits that other federally-recognized tribes receive through
their sovereignty? This tribe is not looking for a handout. But
it is looking for a hand up. That hand up is full Federal
recognition that will give them the additional tools needed to
improve their economic situation in their county, in their
health care system and in their schools.
For those members that may not know historically, in 1956,
the legislation dealt with five tribes. Today, only one of
those five tribes has not, by an act of Congress, been
federally recognized, and they are the Lumbee Indians. Congress
has gone back and remedied four other tribes that were caught
in the same congressional malaise, and they have by an act of
Congress recognized these tribes. Only the Lumbees, only the
Lumbees have been excluded from that Federal recognition.
I am confident that after Chairman Godwin's testimony
today, you will understand the injustice and discriminatory
policies against the Lumbee Tribe. The Lumbee were put into
this situation by Congress in 1956, and it is time we act and
grant the Tribe their much-deserved full Federal recognition.
I ask that you right this wrong for current and future
generations of Lumbees. Mr. Chairman, I thank you for the
privilege of speaking on an issue that is not only important to
me, not only important to the Lumbees, but I think it should be
important to us as members of Congress. It was an act of
Congress that put them in the box that they are in. Four-fifths
of that box has been fixed. One-fifth remains still to be
fixed. And I do hope that this Committee will see it as their
mission to right a wrong and to fix the fifth.
I thank the Chairman.
The Chairman. Thank you very much, Senator Burr.
We will now hear from our witnesses. We have four. The
first is Ms. Cheryl Andrews-Maltais, who is the Senior Policy
Advisor to the Acting Assistant Secretary of Indian Affairs for
the Department of Interior. We will also hear from the
Honorable Harvey Godwin, Jr., who is the Chairman of the Lumbee
Tribe of North Carolina; the Honorable Kenneth McDarment, Vice
Chairman of the Tule River Indian Tribe, Porterville,
California; and Mr. Derrick Watchman, who is the Chairman of
the National Center for American Enterprise Development from
Mesa, Arizona. I would ask that each of you try to limit your
remarks to five minutes. We will make sure that your entire
written testimony is made part of the official hearing record
today. So if you could keep your remarks to five minutes, that
will allow time for questioning.
We look forward to hearing your testimony, beginning with
Ms. Andrews-Maltais.
STATEMENT OF CHERYL ANDREWS-MALTAIS, SENIOR POLICY ADVISOR TO
THE ACTING ASSISTANT SECRETARY ON
INDIAN AFFAIRS, U.S. DEPARTMENT OF THE INTERIOR;
ACCOMPANIED BY JACK STEVENS, ACTING DIRECTOR,
OFFICE OF INDIAN ENERGY AND ECONOMIC DEVELOPMENT
Ms. Andrews-Maltais. Thank you, and good afternoon,
Chairman Barrasso and members of the Committee. My name is
Cheryl Andrews-Maltais, and I am a senior advisor to the
Assistant Secretary on Indian Affairs in the Department of the
Interior. I would like to thank you for the opportunity to
provide the Department's statements on four bills today.
The first bill is Senate Bill 2285, the Lumbee Recognition
Act. We think it is important to restate that under the
Constitution, Congress has the authority to recognize a
distinctly Indian community as an Indian tribe. Federal
acknowledgement enables Indian tribes to participate in Federal
programs and establishes a government-to-government
relationship between the United States and the Indian tribe,
and recognizes certain legal rights under Federal law.
We note that the authority to acknowledge an Indian tribe
has been delegated to the Secretary of the Interior to act in
appropriate cases. However, in this instance, we are barred by
statute from recognizing the Lumbee Tribe, and we do note a few
administrative concerns. However, the Department supports the
bill, with amendments as discussed in our written testimony.
Second is Senate Bill 3234, the Indian Community Economic
Enhancement Act, a bill to amend the Native American Business
Development, Trade Promotion and Tourism Act, the Buy Indian
Act and the Indian Trader Act and the Native American Programs
Act, which would provide industry and economic development
opportunities to Indian communities. The Obama Administration
has consistently supported avenues that foster and promote
economic development in Indian Country. For far too long,
Native communities have experienced disproportional barriers to
opportunities for economic development. This bill seeks to
improve economic conditions in Native communities by expanding
capital for Native entrepreneurs, creating Native procurement
opportunities and encouraging tourism as a revenue source.
In reviewing this bill, the Department is pleased to see
legislation that seeks to directly impact and foster economic
development in Indian Country. We support these goals and offer
a number of technical changes to improve the bill which are
specifically noted in our written testimony.
For example, Section 3 of the bill would change the Native
American Business Development Trade Promotion and Tourism Act
to expand the use of and funding for the Loan Guarantee,
Insurance and Interest Subsidy Program created under the Indian
Financing Act, and would offer increased resources for this
program. In Section 4, the Buy Indian Act is an important
component of the Department's goal of fostering and supporting
American Indian and Alaska Native entrepreneurship by promoting
the Federal procurement of goods and services from Native-owned
businesses, thereby supporting economic development in Indian
Country.
One specific technical change to this section would be
adding language that allows reporting of Buy Indian Act actions
to include procurement via 8(a) whenever applicable. We also
request the drafters consider adding a category that captures
other Indian enterprises, as Indian Affairs does business with
Indian enterprises that may not meet the specific requirements
of the Act.
Additionally, we believe the Buy Indian Act could work as a
socioeconomic set-aside in the Small Business Administration.
Established on a larger scale and applicable to other agencies
beyond the Indian Health Service and the Department. Section 5
of the bill amends the Indian Trader Act to include a provision
granting the Secretary the authority to waive certain license
requirements if the tribe has enacted tribal laws to govern its
licensing, trade or commerce.
Because tribes have a strong interest in creating a
comprehensive tribal regulatory scheme to regulate trade and
commerce on tribal lands, improving the Indian trader statutes
by creating a contemporary, comprehensive framework regarding
trade in Indian Country benefits everyone. The Department
supports the goals and objectives of these bills and offers to
continue to work with the Committee and tribes in developing
legislation to meet the unique economic and employment needs of
Indian Country.
The Department also understands that other agencies within
the Administration may have additional comments on this bill
and would like to provide that to this Committee.
Third, the Native American Business Incubators Act is a
bill that would establish a business incubator program within
the Department to promote economic development on Indian
reservations and communities. The Department strongly supports
this bill's purpose, which is to impart critical knowledge and
provide technical assistance to entrepreneurs and start-up
businesses in Indian Country. The department notes that Section
4 contains very detailed and prescriptive requirements related
to the establishment and administration of the program. We
would like to work with the Committee to simplify these
requirements to ensure the program can be flexibly implemented.
To conclude, the Department supports this bill, S. 3261,
and is committed to working with the Committee on helping to
improve it.
Lastly, we have House Rule 4685, the Tule River Reservation
Land Trust, Health and Economic Development Act. This bill
declares that approximately 34 acres of public land currently
managed by BLM shall be held in trust for the benefit of the
Tule River Indian Tribe. The Department of the Interior
welcomes the opportunity to work with Congress on lands to be
held in trust and supports the bill with minor technical edits
as noted in our written testimony.
Thank you very much, and I am available to answer any
questions anyone may have.
[The prepared statement of Ms. Andrews-Maltais follows:]
Prepared Statement of Cheryl Andrews-Maltais, Senior Policy Advisor to
the Acting Assistant Secretary on Indian Affairs, U.S. Department of
the Interior
h.r. 4685
Thank you for the opportunity to testify on H.R. 4685, which
declares that approximately 34 acres located in Tulare County,
California, shall be held in trust for the benefit of the Tule River
Indian Tribe. The Department of the Interior welcomes opportunities to
work with Congress on lands to be held in trust and supports H.R. 4685,
if amended to address concerns noted below.
Background
The Tule River Indian Tribe (Tribe) is a federally recognized
Indian tribe that resides on the Tule River Indian Reservation
(Reservation). The Reservation was initially set aside in 1873, and
currently comprises approximately 54,000 acres of rugged foothill lands
of the Sierra Nevada Mountains in south central California. The lands
proposed to be held in trust for the Tribe under the bill are
immediately west of the Reservation and are adjacent to fee lands owned
by the Tribe. This isolated parcel has been used mainly for tribal
grazing land. The Tribe is constructing a waste water treatment
facility on the fee lands.
H.R. 4685
H.R. 4685 declares that approximately 34 acres of public land
currently managed by the BLM shall be held by the United States in
trust for the Tribe, subject to valid existing rights and management
agreements related to easements and rights-of-way (including pending
ROW applications). Under the bill, the Secretary of the Interior would
be required to verify valid existing rights by notifying anyone
claiming a management agreement, easement, or other right-of-way, that
the lands are now held in trust. Upon this notification, any parties
claiming such rights would have 60 days to submit an application to the
Secretary requesting that the valid existing rights be converted to a
long-term easement or other right-of-way. After submission, the
Secretary would be required to grant or deny the application within 180
days; if the Secretary has not acted within this time period, the
application would be automatically granted.
Currently, the lands proposed to be held in trust contain two
rights-of-way authorizations in place for roads and water pipelines,
both for the benefit of the Tule River Tribe, and one right-of-way
authorization for power lines to the reservation held by Southern
California Edison. Based on a review of aerial imagery, a house may
straddle the boundary between the reservation and public land; a survey
would be required to determine exact location, and if further action is
needed to resolve boundary. There are no other BLM authorizations, such
as easements and leases, on the property, and no mining claims or other
encumbrances are known to exist.
The Department supports placing the 34-acre parcel into trust
status for the Tribe, and we would like the opportunity to work with
the sponsor and Committee on language clarifying the Department of the
Interior's responsibilities regarding any improvements, appurtenances,
and personal property that may be transferred along with the lands. The
Department believes that this clarification is necessary to address
concerns about the Federal government having a fiduciary obligation to
repair and maintain any acquired improvements. Also, the claimed valid
existing rights verification process outlined in Section 2(d) appears
to establish an additional, unneeded forum for the resolution of such
claims. Generally, valid existing rights on lands held in trust
continue in effect until the end of the term, at which time the BIA may
negotiate any new or renewed authorizations.
Conclusion
The Department of the Interior welcomes opportunities to work with
Congress and tribes on holding lands in trust. We support the intent of
the legislation and look forward to working with the sponsor and the
Committee to address the issues we have outlined in this testimony.
s. 2285
Chairman Barrasso, Vice-Chairman Tester and members of the
Committee, my name is Cheryl Andrews-Maltais, Senior Policy Advisor to
the Assistant Secretary--Indian Affairs at the Department of the
Interior (Department). Thank you for the opportunity to provide the
Administration's testimony on S. 2285, the ``Lumbee Recognition Act.''
The acknowledgment of the continued existence of another sovereign
is one of the most important responsibilities of the United States.
Under the Constitution, Congress has the authority to recognize a
``distinctly Indian community'' as an Indian tribe. Federal
acknowledgment enables Indian tribes to participate in Federal programs
and establishes a government-to-government relationship between the
United States and the Indian tribe, and recognizes certain legal rights
under Federal law. We note that the authority to acknowledge an Indian
tribe has been delegated to the Secretary of the Interior to act in
appropriate cases. In this instance, we are barred by statute from
recognizing the Lumbee Tribe. We support S. 2285, with amendments as
discussed below.
S. 2285, the ``Lumbee Recognition Act''
In 1956, Congress designated Indians then ``residing in Robeson and
adjoining counties of North Carolina'' as the ``Lumbee Indians of North
Carolina'' in the Act of June 7, 1956 (70 Stat. 254). Congress went on
to note the following:
Nothing in this Act shall make such Indians eligible for any
services performed by the United States for Indians because of
their status as Indians, and none of the statutes of the United
States which affect Indians because of their status as Indians
shall be applicable to the Lumbee Indians.
In 1989, the Department's Office of the Solicitor advised that the
1956 Act forbade the Federal relationship within the meaning of the
acknowledgment regulations, and that the Lumbee Indians were therefore
precluded from consideration for Federal acknowledgment under the
administrative process. Because of the 1956 Act, the Lumbee Indians
have been unable to seek Federal acknowledgment through the
Department's administrative process.
Given that Congress specifically addressed the Lumbee Indians in
the 1956 Act, which Interior interpreted as barring the Department from
undertaking an acknowledgment review, only Congress may take up the
matter of Federal recognition for the Lumbee Indians.
S. 2285 extends Federal recognition to the ``Lumbee Tribe of North
Carolina'' and permits any other group of Indians in Robeson and
adjoining counties whose members are not enrolled in the Lumbee Tribe
to petition under the Department's acknowledgment regulations. Before
2015, the Department's Office of Federal Acknowledgment received
letters of intent to petition from multiple groups including the Lumbee
Tribe named in this bill whose claims and memberships may overlap.
Therefore, we recommend Congress clarify the Lumbee group that would be
granted recognition under this bill based on the group's current
governing document which includes clear enrollment requirements and
procedures and its current membership list. Not doing so could
potentially expose the Federal Government to unwarranted lawsuits and
possibly delay the Department's acknowledgment process for the other
groups not enrolled in the Lumbee Tribe.
Under S. 2285, the State of North Carolina has jurisdiction over
criminal and civil offenses and actions on lands within North Carolina
owned by or held in trust for the Lumbee Tribe or ``any dependent
Indian community of the Tribe.'' Additionally, the Secretary of the
Interior is authorized to accept a transfer of jurisdiction over the
Lumbee Tribe from the State of North Carolina, after consulting with
the Attorney General of the United States and pursuant to an agreement
between the Lumbee Tribe and the State of North Carolina. Such transfer
may not take effect until two years after the effective date of such
agreement.
We are concerned with the provision requiring the Secretary, within
two years, to verify the tribal membership and then to develop a
determination of needs and budget to provide Federal services to the
Lumbee group's eligible members. In our experience, verifying a tribal
roll is an extremely involved and complex undertaking that can take
several years to resolve. Moreover, S. 2285 is silent as to the meaning
of verification for inclusion on the Lumbee group's membership list.
The Act should define who bears the burden of proof, the standards and
procedures for evaluating acceptable generation-by-generation descent
evidence, and appeals processes.
In addition, section 5(c) of S. 2285 may raise a problem by
purporting to require the Secretary of the Interior and the Secretary
of Health and Human Services to submit to the Congress a written
statement of a determination of needs for the Lumbee Tribe for
programs, services and benefits to the Lumbee Tribe. The appropriate
means for communicating to Congress a determination of needs for
programs administered by the Department of the Interior and the
Department of Health and Human Services is the President's Budget.
Conclusion
Thank you for providing the Department the opportunity to prove
input into S. 2285. The Department supports S. 2285 with amendments. I
am available to answer any questions the Committee may have.
s. 3234
Chairman Barrasso, Vice-Chairman Tester, and members of the
Committee, my name is Cheryl Andrews-Maltais, and I am the Senior
Advisor to the Assistant Secretary for Indian Affairs at the Department
of the Interior (Department). Thank you for the opportunity to provide
testimony before this Committee on S. 3234, the Indian Community
Economic Enhancement Act of 2016, a bill to amend the Native American
Business Development, Trade Promotion, and Tourism Act of 2000, the Buy
Indian Act, the Indian Trader Act, and the Native American Programs Act
of 1974 to provide industry and economic development opportunities to
Indian communities.
During the Obama Administration we have consistently supported
avenues that foster and promote economic development in Indian Country.
For too long, Native communities have experienced disproportional
barriers to economic development. Economic development is critical for
building capacity in Indian Country in other areas such as law
enforcement, health, education, natural resource management, and
infrastructure. Even in good economic times, the unemployment rate in
these communities and villages is double the national average. As
antidotes to these conditions, our Department offers access to capital,
technical assistance for Native entrepreneurs and business start-ups,
guidance on developing the legal infrastructure necessary for economic
progress, and expert assistance in the development of commercially
valuable minerals and conventional and renewable energy resources. In
reviewing S. 3234, the Department is pleased to see legislation that
seeks to directly impact and foster economic development in Indian
Country.
We support the goals of S. 3234.
S. 3234 seeks to improve economic conditions in Native communities
by expanding capital for Native enterprises, creating Native
procurement opportunities, and encouraging tourism as a revenue source.
Currently, our Department's Office of Indian Energy and Economic
Development (IEED), which carries out much of the work addressed by the
bill, works to foster stronger American Indian and Alaska Native
economies. The Division of Capital Investment (DCI) within IEED
facilitates access to capital for Indian-owned businesses. In FY 15,
the Program was able to guarantee $99.8 million in loans to Indian
Country from an appropriation of $6.7 million. Since 1992, the Program
has encouraged well over $1.4 billion in Indian business lending that
would not otherwise have occurred.
Section 3 of S. 3234 would change the Native American Business
Development, Trade Promotion, and Tourism Act of 2000 to expand use of
and funding for the Loan Guarantee, Insurance and Interest Subsidy
Program created under section 201 of the Indian Financing Act of 1974
(25 U.S.C. 1481). S. 3234 would offer an increase in resources for this
program. We suggest a number of technical changes to improve S. 3234:
In Section 8 the bill refers to the ``the loan guarantee
program of the Bureau of Indian Affairs.'' This should be
changed to ``the Indian Loan Guarantee, Insurance and Interest
Subsidy Program.'' (ILGIISP)
The bill should also be amended to clarify how the
additional credit subsidy would be made available pursuant to
the Federal Credit Reform Act of 1990, or how the bill would
affect procedures developed by the Office of Management and
Budget, the Department of the Treasury, and our Department to
assure transparent use of funds.
S. 3234, Section 4 the ``Buy Indian Act'' is an important component
of the Department's goal of fostering and supporting American Indian/
Alaska Native entrepreneurship. The Buy-Indian Act promotes the federal
procurement of goods and services from American Indian- and Alaska
Native-owned businesses, thereby supporting economic development in
Indian Country. The Bureau of Indian Affairs has obtained services and
supplies from Indian sources using the Buy Indian Program since 1965,
based on policy memoranda and acquisition. In 2013, we finalized the
first rule to implement the Buy Indian Act within the Department.
Section 4 of S. 3234 concerns the Buy Indian Act. We recommend a
number of technical changes to these provisions, such as adding
language that allows reporting of Buy Indian Act actions in procurement
via 8(a), when applicable. It would also be helpful to scale down the
reports to reflect summary data only and to include only those set-
aside contracts that deviate from this policy. The bill's authors might
want to consider adding a category that captures ``Other Indian
Enterprise,'' as Indian Affairs does business with Indian Enterprises
that may not meet the requirements of Buy Indian Act. Furthermore, we
believe the Buy Indian Act could work as a socio-economic set-aside in
SBA, whereby the goals can be established on a larger scale and
applicable to agencies beyond Indian Health Service and the Department.
Finally, we recommend adding language to the reporting requirement to
include ``action'' along with ``acquisition.''
Section 5 of the bill amends the Indian Trader Act of 1876 to
include a provision granting the Secretary the authority to waive any
applicable licensing requirements if a tribe has enacted tribal laws to
govern licensing, trade, or commerce. Passed in 1876 and 1901,
respectively, the Indian Trader Statues are still vitally important but
could be improved to reflect the current policies of Tribal self-
determination and self-governance. Tribes have a strong interest in
comprehensive tribal regulatory schemes regulating trade on tribal
lands. There remains a strong Federal and Tribal interest in a
comprehensive framework regarding trade occurring in Indian Country.
The Department supports section 5 and offers to work with the Committee
and tribes in developing legislation to modernize the Indian Trader
Statutes to meet the needs of Indian country.
We understand that other agencies within the Administration may
have additional comments on the bill.
Conclusion Thank you for providing the Department the opportunity
to prove input into S. 3234. I am available to answer any questions the
Committee may have.
s. 3261
Chairman Barrasso, Vice-Chairman Tester, and members of the
Committee, my name is Cheryl Andrews-Maltais. I am the Senior Policy
Advisor to the Assistant Secretary--Indian Affairs at the Department of
the Interior (Department). Thank you for the opportunity to provide
testimony before this Committee on S.3261, the Native American Business
Incubators Act, a bill to establish a business incubators program
within the Department of the Interior to promote economic development
in Indian reservation communities. The Department supports S. 3261.
S. 3261 would establish a program in the Office of Indian Energy
and Economic Development under which the Secretary would provide
financial assistance in the form of competitive grants to eligible
applicants for the establishment and operation of business incubators
that serve reservation communities by providing business incubation and
other business services to Native businesses and Native entrepreneurs.
Eligible applicants would include Indian tribes, a tribal college or
university, an institution of higher education, and a private, non-
profit organization or a tribal non-profit organization that could
provide services to Native businesses and Native entrepreneurs. The
bill allows for joint projects and sets forth application and selection
processes and requirements. Section 5 provides for the Secretary to
promulgate regulations to implement the program. Section 6 would
facilitate the establishment of relationships between eligible
applicants and educational institutions serving Native American
communities. The Secretary would also coordinate with the Secretaries
of Agriculture, Commerce Treasury and the Administrator of the Small
Business Administration.
The Department strongly supports this bill's purpose, which is to
impart critical business knowledge and provide technical assistance to
entrepreneurs and start-up enterprises in American Indian and Alaska
Native (AI/AN) communities. Should S. 3261 be enacted, the Department
would evaluate the incubator grant proposals, disburse grant funding,
and provide the on-site audits and monitoring of incubators described
in the bill.
We note that section 4 of S. 3261 contains very detailed and
prescriptive requirements related to establishment of the program, the
application and selection process, and the evaluation process. We would
like to work with the Committee to simplify these requirements to
ensure that the program can be flexibly implemented. The Department is
committed to working with the Committee to improve S. 3261.
Currently, Indian Affairs' Office of Energy and Economic
Development prepares and publishes online technical assistance primers
for use by Native entrepreneurs on topics such as ``Choosing a Tribal
Business Structure,'' ``Making an Effective Business Presentation,''
``Financing a Tribal or Native Owned Business,'' and ``Procurement
Opportunities for Native Americans,'' among others. S. 3261 strengthens
this work by facilitating on the ground technical assistance to Native
entrepreneurs.
There are structural barriers to economic development that are
unique to Indian Country which both prevent interested entrepreneurs
from coming forward and existing ones from being successful. First,
Native entrepreneurs lack access to capital. Eighty-six percent of
tribal lands do not have a bank and 15 percent of AI/AN live 100 miles
or more from a bank. Of financial institutions on or near AI/AN
communities, only 33 percent offer start-up loans, 29 percent offer
small business loans, and just 26 percent offer micro business loans.
\1\ Too many Native American communities are in poverty because of the
unavailability of hands-on technical training centers for Native
American business men and women to build and sustain businesses.
Second, small businesses are not yet creating enough employment
opportunities in Native communities. \2\ Right now, only 13 percent of
AI/AN entrepreneurs have entrepreneur parents, compared to 75 percent
in the general population. \3\ The incubators envisioned in S. 3261
would address the dearth of Native entrepreneurs and small businesses
by providing critical know-how to aspiring entrepreneurs.
---------------------------------------------------------------------------
\1\ Drew Tulchin and Jessica Shortall, ``Small Business Incubation
and Its Prospects in Indian Country,'' Social Enterprise Associates,
December 2008, p. 1.
\2\ According to the U.S. Small Business Administration, small
businesses account for two-thirds of new jobs. See, Brookings Policy
Brief Series #175, ``The Future of Small Business Entrepreneurship:
Jobs Generator for the U.S. Economy,'' May 10, 2012.
\3\ Ibid., Tulchin and Shortall, p. 2.
---------------------------------------------------------------------------
Conclusion
Thank you for the Department the opportunity to provide testimony
on S. 3261. The Department supports S. 3261. I am available to answer
any questions the Committee may have.
The Chairman. Thank you very much for your testimony.
Now, Chairman Godwin.
STATEMENT OF HON. HARVEY GODWIN, JR., CHAIRMAN, LUMBEE TRIBE OF
NORTH CAROLINA
Mr. Godwin. Good afternoon, Chairman Barrasso, Vice
Chairman Tester and members of the Committee on Indian Affairs.
My name is Harvey Godwin, Jr., and I proudly serve as Chairman
of the Lumbee Tribe of North Carolina.
It is my honor and privilege to address you this afternoon
regarding Senate Bill 2285, an act to provide for full
recognition to the Lumbee Tribe. I would like to give a special
thank you to Senator Richard Burr for sponsoring this
legislation. We greatly appreciate his efforts and this
opportunity.
The Lumbee have sought full federal recognition for 128
years. As I come before you today, I can't help but think of my
great-grandfather, Quinny Godwin, one of the original
petitioners for Lumbee Federal Recognition in 1888. Could those
petitioners have conceived their great-grandchildren would
still be involved in this same pursuit of justice?
As part of our pursuit of recognition, we have endured an
array of research, pseudo-scientific studies and even
congressional legislation, that while recognizing the existence
of our Indian community has ultimately resulted in the
political and legal marginalization of our people. With an
ever-diminishing regional economy, the Lumbee people currently
suffer high levels of unemployment, resulting in low
socioeconomic status and significant health-related issues.
Since 1990, over 12,000 jobs have been lost within our
territory. Robeson County, the home of our tribal government,
has the highest county-level poverty rate in the State, and is
rated one of the top ten poorest counties in the Nation, with
one in three residents living in abject poverty. Approximately
34 percent of children in Robeson County live in food-insecure
homes, placing our county 10 percent higher than the North
Carolina average. American Indian children in Robeson County
experience food insecurity at almost double the rate of Robeson
County as a whole.
Despite all of our setbacks, our leaders continue to
advocate for self-determination amongst our people, through the
creation of Indian schools, churches and civic organizations.
We work to establish ourselves as contributing members of our
local and regional communities. We regularly engage with other
Native nations through institutions such as the National
Congress of American Indians.
In 1990, we adopted our first formal constitution. We are
committed to good governance, for our people, by our people. We
recently instituted a number of critical reforms to ensure
greater transparency and efficiency for the benefit of our
people. My election was a mandate from our citizens to re-
establish core Lumbee values. Number one, belief in God,
cultural preservation and emphasis on education and protecting
our connection to the land.
Our homeland is fortunate to have proximity to major
industry to interstate trade routes, viable infrastructure and
educational venues, all of which are primary ingredients for
sustainable economic development. Federal recognition would
help us to leverage these existing assets. For instance, we
have a recognized natural resource in the Lumbee River, and it
holds tremendous opportunity for recreational business
development and cultural tourism.
The provision of health care to tropical members would not
only be a boost to the well-being of our people, it would also
reduce our dependence on Medicaid and create more health care
jobs in the area as access to health care improves. Recognition
would help us build on existing momentum, as we recently
received tribal a tribal 8(A) certification administered by the
Small Business Administration.
Although we participate in some Federal programs, such as
the Workforce Innovation and Opportunity Act, access to the
full range of programs as a federally-recognized tribe would
allow us to grow our efforts, promoting workforce development,
education and entrepreneurship.
In conclusion, the Lumbee people are seeking a new type of
partnership with the Federal Government. We will use full
Federal recognition to create an atmosphere for economic
development in rural southeastern North Carolina. Your support
of this bill is a strategic investment in the Lumbee people and
our neighbors. It will become an example of how bringing
justice also empowered our tribe to develop a sovereign, self-
determined, broad-based economy that will improve our quality
of life and that of the region in which we reside.
On behalf of the Lumbee Tribe, I thank you for this
opportunity. I will entertain any questions that you may have.
[The prepared statement of Mr. Godwin follows:]
Prepared Statement of Hon. Harvey Godwin, Jr., Chairman, Lumbee Tribe
of North Carolina
Good Afternoon Chairman Barrasso, Vice Chairman Tester, and members
of the Committee on Indian Affairs. My name is Harvey Godwin, Jr. and I
proudly serve as Chairman of the Lumbee Tribe of North Carolina. It is
my honor and privilege to address you this afternoon regarding Senate
Bill 2285, a Bill to provide for the recognition of the Lumbee Tribe of
North Carolina. I would like to give a special thank you to Sen.
Richard Burr for sponsoring this legislation. He has proven to be a
champion of the Lumbee people, and we greatly appreciate his efforts to
bring us here today.
The Lumbee Tribe of North Carolina represents approximately 35,000
enrolled members. Our tribal territory has traditionally consisted of
Robeson, Scotland, Hoke, and Cumberland counties. North Carolina
recognized the Lumbee's status as an Indian tribe in 1885. The Lumbee
began their fight for federal recognition in 1888 by petitioning the
Federal Government for educational aid to support the Croatan Indian
Normal School.
After successfully establishing what is now the University of North
Carolina at Pembroke, historically the Nation's first American Indian
university institution, tribal leaders then sought assistance,
resources, and tools from the government so that they might, through
hard work and self-determination, build a better and more prosperous
life for their members.
The Lumbee have respectfully and patiently sought federal
recognition for 128 years. During this pursuit, we have endured an
array of research, pseudoscientific studies, and even congressional
legislation that has ultimately resulted in the marginalization of our
people. As a result of this and an ever-diminishing regional economy,
the Lumbee people currently endure high levels of unemployment
resulting in low socio-economic status, low educational attainment, and
significant health-related issues. Since 1990, over 12,000 jobs were
lost within the tribal territory. Manufacturing has all but evaporated.
Farming, once the life-blood of our people, is not at all what it used
to be. Robeson County, the seat of our tribal government, has the
highest county-level poverty rate in the state and is one of the top
ten poorest counties in the nation, with 1 in 3 residents living in
abject poverty. \1\ Lumbee Indians make up 39.9 percent of the
population of Robeson County. \2\ Approximately 34 percent of children
in Robeson County live in food insecure homes, without even the most
basic needs, placing our county 10 percent higher that the North
Carolina state average. American Indian children in Robeson County
experience food insecurity at almost double the county rate.
---------------------------------------------------------------------------
\1\ http://pulse.ncpolicywatch.org/2014/01/11/north-carolinas-
counties-remain-in-povertys-tight-grip/
\2\ http://www.census.gov/quickfacts/table/RHI125215/37155
---------------------------------------------------------------------------
Without the benefits afforded to fully recognized tribes, our
efforts have focused on developing a strong tradition of self-
governance to try to combat the socio-economic afflictions we face. We
developed a tribal government committed to the Rule of Law and governed
by a Constitution crafted for our people by our people. There are three
branches of government: the Legislative, a 21 member tribal council,
comprised of representatives from 21 districts; the Executive: a
Chairman elected by the membership; and the Judiciary to hear disputes
arising out of our tribal law.
Our formalized government is young and like any other government
there have been bumps and growing pains as we have found our way.
Recently, however, there have been a number of governmental reforms
instituted to ensure that there is greater transparency and efficiency
for the benefit of our people. My own election represented a mandate
from our tribal members to take back our government and reestablish our
core Lumbee values: Belief in God, preserving our unique culture, the
importance of education, and our connection to the land.
The Lumbee Tribal Government today views federal recognition as an
opportunity to create a solid economic foundation that will ensure a
better future for the next seven Generations of our People. Federal
recognition is a vehicle for empowering our communities rather than an
end-all-be-all for our problems. We do not seek recognition as an
entitlement fostering dependency on the Federal Government rather we
seek resources to help us cross the bridge towards prosperity that we
have been seeking for these many years. To us, recognition is a tool
that will greatly aide our current endeavors to create sustainable
economic development for the Lumbee and the poor rural areas of
Southeastern North Carolina that we occupy. Through federal programs
such as the WIOA, we will implement programs promoting workforce
development, giving our members the skills they need to find their own
success, as opposed to merely relying on support from the tribal
government. The national conversation is always focused on the American
Dream. The American Dream is and always has been the Lumbee Dream.
Provide people the tools necessary and the opportunities and they will
excel and create a better life for themselves and the seven generations
that come after them.
Our home area is fortunate to have proximity to major interstate
trade routes, viable infrastructure and educational venues, all of
which are primary ingredients for sustainable business/industry
development. It is our desire to utilize federal recognition as a tool
to leverage these existing assets, guided by tribal leadership that is
focused on the will of the People. We envision the Lumbee Tribe
assisting tribal members in developing business ventures based on our
cultural and natural resources. For instance, we have a recognized
natural resource in the Lumber River that holds tremendous opportunity
for recreational business development. Our own Cultural Center has
significant potential for cultural and recreational tourism, and is the
site of our planned Tribal Community Garden. Endeavors such these could
employ not only tribal members, but others in the area that are in
pursuit of opportunity, thereby enriching the entire area.
The Lumbee are known for our entrepreneurial spirit. Just this
year, the Lumbee Tribe of North Carolina along with the University of
North Carolina at Pembroke and the North Carolina Military Business
Center hosted the first annual Lumbee Nation Economic Summit. Federal
recognition will allow the Tribe to assist entrepreneurial development,
help members with attaining necessary banking/lending support, and
promoting the economic development partnerships created by federal
recognition. Additionally, the provision of adequate healthcare for
tribal members would be a boost to the health and well being of our
people. Establishing an economic engine that will create more
healthcare jobs for our people and reduce dependence on such things as
Medicaid. We have obtained Tribal 8A Certification administered by the
Small Business Administration. As a state recognized tribe, our
corporations are eligible for some government contracts but until we
gain full federal recognition, we cannot fully claim our seat at that
table. Full federal recognition will make the Lumbee eligible for
grants through the USDA and other federal governmental agencies,
programs that we are ineligible to participate in now because of our
status as non-federally recognized tribe. There are a number of Lumbee
Indians who currently employed by the Federal Government; because they
are not members of a federally recognized tribe they are ineligible for
Indian Preference when applying for jobs and promotions within our
government.
The Lumbee's unique legal status was created through congressional
action and should be rectified by congressional action. The Lumbee Act
of 56 acknowledged that the Lumbee were in fact an Indian tribe.
However language was added to the Lumbee Act, denying our people
federal benefits. Congress's action in 1956 placed the Lumbee in a
quasi status, acknowledged as Indian tribe but denied the federal
benefits that are associated with that recognition. It is important to
understand that during this period of our country's history Congress's
policy toward all Indian tribes was termination. History shows us that
Congress's views on American Indians and Indian policy evolved. They
repealed all legislation that was interpreted as termination from this
era EXCEPT for the Lumbee Act. In fact, there is one other tribe who
has suffered from the same quasi status as the Lumbee, The Tiwa of
Texas. Congress passed legislation in 1968 that recognized the Tiwa
Indians of Ysleta, Texas and included the same language that denied
benefits, that was a part of the Lumbee Act. Congress rectified this in
1987, passing legislation that restored the federal trust relationship
with the Tiwa and provided federal Indian services for the tribe.
The Department of the Interior has created a process for
acknowledging American Indian Tribes. This process is not an option for
the Lumbee Tribe of North Carolina. In 1989, the Department of the
Interior released an opinion from the Associate Solicitor regarding the
1956 Lumbee Act. The opinion advised the Department of the Interior
that the Lumbee were ineligible to complete the BIA process because of
the language of the Lumbee Act.
In recent hearings the Department of the Interior has gone on
record a number of times supporting Congressional Legislation to
restore full federal recognition to the Lumbee Tribe. During a 2009
hearing before the House Natural Resource Committee, Assistant
Secretary for Policy and Economic Development for Indian Affairs for
the Department of Interior George Skibine advocated for congressional
action for the Lumbee. Assistant Secretary Skibine said ``. . .there
are rare circumstances when Congress should intervene and recognize a
tribal group, and the case of the Lumbee Indians is one such rare
case.'' In 2013, Assistant Secretary for Indian Affairs, Kevin Washburn
testified before this very committee saying ``Given that it is Congress
that has specifically addressed the Lumbee Indians on a previous
occasion and has barred Interior from undertaking this review, only
Congress can take up the matter of federal recognition for the Lumbee
Indians''. Congress placed the Lumbee Tribe in legal limbo with the
Lumbee Act of 56 and only Congress can remove this status and restore
the Lumbee to full federal recognition.
I want to reiterate that the Lumbee people are seeking a new type
of partnership with the Federal Government. We will use federal
recognition to help create an atmosphere for economic development in
rural North Carolina, thereby bolstering the American Middle Class.
Your support of this bill is a strategic investment in the Lumbee
people and the country as a whole. It will become a new reference point
for how to allow American Indians to truly develop sovereign, self-
determined, broad-based economies that will improve the lives of all.
I would like to end my testimony by emphasizing the importance of
the circle in indigenous cultures. The circle is important in all
Native cultures, and especially so in the Lumbee Tribe. The circle
shows our connection with each other, with our past, our present, and
our future, representing the 7 Generations. I cannot help but feel the
significance of that connection today as I come before you asking for
your support in empowering my people, in much the same way as my Great
Grand Father Quinny Godwin did as one of the original petitioners of
Lumbee federal recognition in 1888. I am blessed that things have come
full circle today and like my great-grandfather before me, I am asking
this Committee to do the same. My greatest hope is that my great-
grandchildren will not have to fight this battle three generations from
now.
On behalf of the Lumbee Tribe, thank you for the opportunity to
address this Committee.
The Chairman. Thank you very much, Chairman Godwin. I
appreciate your being here. I appreciate you, Senator Burr,
staying for the entirety of the testimony. Thank you.
Vice Chairman McDarment, please proceed.
STATEMENT OF HON. KENNETH McDARMENT, VICE CHAIRMAN, TULE RIVER
INDIAN TRIBE
Mr. McDarment. Good afternoon, Chairman John Barrasso, Vice
Chairman Jon Tester, fellow members of the Committee. My name
is Kenneth McDarment. I serve as Vice Chairman of the Tule
River Tribe. I am a graduate of Porterville High School, in
Porterville, California, class of 1992. After graduating, I
worked in the oil fields and then on to trade school.
Currently, I am serving my second term on the Tule Tribal
Council. I am married, with four children. I humbly serve my
community as a tribal leader, father, husband, rancher.
I come before you today to respectfully request support of
the United States Government in securing land for the Tule
River Reservation. I send greetings and best wishes from all
the members of the Tribal Council.
The Tule River Tribe of California considers land within
our aboriginal territory very important. In H.R. 4685, we are
taking about 34 acres. Although this may not seem like a lot of
land, every acre of land is important to our tribe. We have
lived in California for thousands of years and the land and our
language have been an integral part of our culture. It is
important for us to be able to control this particular parcel
of land, because it is situated at the main entrance to our
reservation.
To me, the Tule River Indian Reservation means a lot to me.
I was born and raised there. The Tule River Indian Reservation
consists of a little over 56,000 acres. The land runs from the
lower foothills of the reservation to the redwoods at the
6,500-foot elevation.
This land that we have is used by our tribal members for
hundreds of years, thousands of years, it is used for ranching,
it is used for hunting, fishing, camping, recreational purposes
for our community and our community members. Just like every
other tribe in the United States, our tribe has problems going
on with it, too. Since our current reservation was created
along with the other reservations within California or the San
Joaquin Valley, from the time we were herded to our first
reservation on to our current location where we are now, there
have been problems. Back in 1922, we lost our water rights. We
have been fighting ever since 1922 to get it back. We are still
unsuccessful with that.
Along with the water problems that we have currently, the
other morning when I left, my wife called me and said, hey, we
are out of water. This is an ongoing thing for us, running out
of water. The chairman is out of water, our community is out of
water. And with the water again, we are also fighting the
illegal crops within our mountains that bring in illegal
chemicals from Mexico that go into our watershed.
Housing is a problem. We have 28 departments that the tribe
funds which supports our community and also provides jobs for
the community. We have a little over 1,800 members.
This piece of land that is at the very entrance to our
reservation, to get to our reservation, you have to cross this
land. It is a little rough area, through a little valley right
along the river. You can't do much with the land. So it does
mean a lot to us. It does mean a lot to my people.
Thank you.
[The prepared statement of Mr. McDarment follows:]
Prepared Statement of Hon. Kenneth McDarment, Vice Chairman, Tule River
Indian Tribe
The Tule River Tribe of California considers land within our
aboriginal territory very important. In H.R. 4685, we are talking about
34 acres. Although this may not seem like a lot of land, every acre of
land is important to our Tribe. We have lived in California for
thousands of years and the land and our language have been an intricate
part of our culture. It is important for us to be able to control this
particular parcel of land because it is situated at the main entrance
to our Reservation.
Introduction
Good afternoon to Chairman John Barrasso, ranking member Jon
Tester, and fellow members of the Committee. My name is Kenneth
McDarment, and I serve as the Vice-Chairman of the Tule River Tribe. I
am a graduate of Porterville High School, in Porterville California,
Class of 1992. After graduation, I worked in the oil fields and then
attended trade school. Currently I am serving my second term on the
Tule River Tribal Council. and I am married with four children. In
these capacities, I humbly serve my community as a tribal leader,
father and husband. I come before you today to respectfully request the
support of the United States government in securing land for the Tule
River Reservation.
I send greetings and best wishes from all the members of the Tribal
Council. We are very grateful for the expeditious scheduling of this
hearing on H.R. 4685, the Tule River Indian Reservation Land Trust,
Health, and Economic Development Act.
Tule River Indian Tribal Land History
The Tule River Reservation is the homeland of the Tule River Tribe.
We are descendants of the Yokuts Indians, a large group of
linguistically-related people who occupied the vast San Joaquin Valley,
and most of the adjoining foothills that surround the Valley, in
California for thousands of years prior to contact with Euroamerican
settlers. Historically there were over fifty (50) independent clans of
Yokuts, each with its own territory and dialect of the Yokuts language.
These clans were friendly to one another and there was much visiting
between each. We were peaceful hunters and gatherers.
Mexico ceded California to the United states in 1848 and also
around that time, gold was discovered near Sacramento. As a result of
this a huge influx of settlers began to move into our aboriginal
territory. California became a State in 1950 and as new people began to
make claims to what had always been our land, there were many
hostilities between the new settlers and the tribes. During this time,
the official Indian policy of the United States was removal of east of
the Mississippi, into the unsettled western lands. But with the
California Indians, there was no more western lands to move to.
Because of the continuing tensions between the new settlers and
Native tribes, three federal Indian commissioners visited California
and negotiated a series of eighteen (18) treaties with the California
Indians. The Tule River Tribe's ancestors were signatories to a treaty
of peace and friendship, formed and concluded at Camp Burton, on Paint
Creek, in the State of California, on the third day of June, 1851.
By this treaty, we relinquished all the claims to the territories
that we had and in return were promised two (2) reservations that were
to be forever held for our sole use and occupancy. At the time, what
was unknown to our ancestors was that in June of 1852, the United
States Senate, meeting in secret session, rejected the treaties and
ordered them filed under an injunction of secrecy . The treaties were
later discovered by a clerk 1905. In 1871, Congress ended the treaty-
making era with Indians. The 18 treaties signed with the Indians of
California were never ratified because of an overwhelming expression of
anti-Indian sentiment by the California delegation. Because of this,
the reservations promised to our people were never created. Instead, in
March 1853 Congress established a Superintendent of Indian Affairs in
California, to relocate Indians to reservations, and also provided for
the establishment of five (5) reservations in California. The site of
the first reservation was at the southern end of the San Joaquin
Valley, near the Tejon Pass area. Our ancestors were rounded up and
forced to move to the Tejon Reservation.
Because of crop failures and the loss of the land to an Indian
agent, the Tejon Reservation was eventually closed. The Tule River
Indian Reservation was established in 1856. Initially known as the Tule
River Indian Farm, it was set up and administered as part of the Tejon
Reservation. During this time, the stated goal of federal Indian policy
in California was to establish reservations throughout the state as
permanent homelands for tribes. The reservations were also intended to
provide tribes with access to traditional hunting territories and
timber in the mountains, land suitable for agriculture, and plenty of
water year-round for irrigation.
The Tule River Farm was located near a Koyete Yokuts village site,
on approximately 2,240 acres of prime San Joaquin Valley farmland in
Tulare County. The land was transected on the southwest corner by the
mainstream of the Tule River. It included part of what is today the
eastern portion of the City of Porterville. The location of this
original Reservation was purposefully selected by the Federal
Government to provide our Tribe with the arable land and water
resources necessary to establish a self-sufficient homeland for its
people. Upon being promised this land as our homeland--ostensibly
forever--we built homes and began to actively cultivate crops.
Despite our relative prosperity in those years, two of the federal
Indian agents assigned to reservations in the area nonetheless saw fit
to capitalize upon the distance and ignorance of the Indian officials
in Washington, D.C. Thomas Madden, a federal Indian agent assigned to
the neighboring Tejon Indian Reservation, applied for and was issued a
land patent under fraudulent circumstances to 1,280 acres of the Tule
River Reservation land from the State of California.
Four years later under a similar arrangement a land patent for
1,160 acres of Tule River Reservation land was issued to Mr. John
Benson, another Indian Agent. These two state land grants encompassed
all of our Reservation lands. The Federal Government was fully aware
that these lands were expressly reserved to us, but it made no effort
to challenge the Madden and Benson land grants. Because the lands had
been set aside for the Tribe, the State of California, had no legal
basis upon which to issue the patents. The land transfers were also a
violation of the federal Trade and Intercourse Act, which expressly
prohibited Indian agents from having ``any interest or concern in any
trade with the Indians.'' Rather than setting aside the issuance of
these patents, the Federal Government actually paid rent to Messrs.
Madden and Benson for at least a dozen years to enable my ancestors to
continue farming what was in actuality our land.
Gradually, over the years, hostility increased between the Indian
farmers and the settlers in the area. In response to the tension, and
rather than enforcing our rights to what should have been our
Reservation land, in January 1873, President Grant issued an Executive
Order creating a new reservation for the Tule River Tribe. It was
comprised of mostly mountainous lands located about fifteen miles to
the east of our original Reservation. The Tule River Indians and the
Indian agent protested the removal; as the new lands would be difficult
to cultivate. The Indian agent, J.B Vosburgh, stated ``The new
reservation is not suited to the wants of the Indians for whose benefit
it has been set apart, if the intention be, as heretofore, to teach
them to become self supporting by means of agriculture, the soil of the
reservation being insufficient both in quantity and quality for their
need.'' He further requested that the government inquire into the
legality of Madden and Benson land patents and, if necessary, requested
the Federal Government to purchase the property from them for the
benefit and use of the Indians. However, no such action was taken, and
our people were forcibly removed from their homes and cultivated
fields.
The removal was very hard on our people. The new Reservation,
though it contained 48,000 acres, was determined by the federal agents,
based on the knowledge and technology of the time, to have scarcely 100
acres of arable land. Even that land was deemed by the agents to be of
poor quality, and thought to be able to support only six families--far
below the needs of our people. An Indian agent reported, ``Year by year
our number has decreased by death and removal, until now there are only
143 Indians, embraced in 30 different families, residing on the
reservation.'' Our situation was so dire that, in response, President
Grant, in October 1873--just 9 months after the initial Executive
Order--signed another Executive Order almost doubling the Reservation's
size to 91,837 acres. Again, very little of these additional lands was
deemed by the federal agents to be suitable for agriculture, and the
few acres which were proven arable were coveted or settled by settlers,
and history repeated itself. In August 1878, President Hays issued an
Executive Order reducing the reservation back to the January 1873 size.
For approximately 140 years we have lived on the Tule River Indian
Reservation.
The Modern-Day Tule River Indian Reservation
Today, our current Reservation includes about 58,000 acres. The
reservation is located in south-central California, approximately 75
miles south of Fresno and 45 miles north of Bakersfield in Tulare
County. The Reservation is situated on the western slope of the Sierra
Nevada Mountains, east of Porterville, and lies almost entirely within
the South Fork Tule River drainage basin. The topography is generally
steep, with elevations ranging from about 900 to 7500 feet above sea
level. Most of the inhabited land is along the lower reach of the South
Fork Tule River on the western side of the Reservation.
The injustices and inequities of the past are still present and are
still affecting our people. We have been plagued with unemployment and
mortality rates substantially higher, and a standard of living
substantially lower, than is experienced by the surrounding non-Indian
communities.
While the on-Reservation socio-economic conditions have improved
over time, to this day, the Reservation residents generally continue to
suffer from a relatively low standard of living.
Conclusion
In closing, I would ask that my testimony and supporting materials
be made a part of the record of this hearing by unanimous consent.
I would be happy to respond to any questions which the members of
the Committee might have.
The Chairman. Thank you so much for your testimony, Vice
Chairman McDarment.
Chairman Watchman?
STATEMENT OF DERRICK WATCHMAN, CHAIRMAN, NATIONAL CENTER FOR
AMERICAN INDIAN ENTERPRISE DEVELOPMENT
Mr. Watchman. Thank you, Chairman Barrasso, Vice Chairman
Tester and members of the Committee. I am Derrick Watchman, and
I am Chairman of the Board for the National Center for American
Indian Enterprise Development. I am also a member of the Navajo
Nation, so yah'eh-teh'.
I appreciate the invitation to testify on S. 3234, the
Indian Economic Enhancement Act of 2016. We commend this
Committee for inovative thinking and distilling all the ideas
and recommendations that we put forth from the National Center
and from the Committee hearings and from our reservation
conferences.
The National Center has provided services to Indian tribes,
Indian businesses, tribally-owned and individually-owned, for
over 50 years. We appreciate partnering with this Committee to
make sure that the Indian Tribal legislation is enacted, such
as 3234 and 3236. We also support the Native American Business
Incubation program.
I have submitted my written testimony, but I want to
highlight a few of the items. Section 3 of the bill. This
section would strengthen the Native American Business
Development Trade Promotion and Tourism Act of 2000 in ways
that we have long advocated. It would elevate and enhance the
Office of Native American Business Development and Commerce by
placing the Director at the Secretary level. We have been
advocating for this, we think that by placing the Director at
this level, it would provide more authority for policy-making,
tribal consultation and commerce within and amongst the
Commerce departments and entities. We also think that by doing
this, it would also enhance the Indian Loan Guarantee Program,
the CDFI and other capital programs.
Most important, though, this office needs to be standalone
within the Secretary's office. We urge, and I ask that you, in
this year's appropriation, that you set aside funds for this
specific office, the Office of Native American, we think it is
very important. I also recommend that Section 3(d) in the
appropriation take a different approach regarding the Indian
Economic Development Fund. We support the fund, but this bill
also augments the Indian Loan Guarantee Program. For years, we
have urged that the Indian Loan Guarantee Program be funded by
approximately $7.5 million. By augmenting this program, we
think that this program will enhance and provide over $250
million in tribal loan guarantees out there in Indian Country,
and that is very much needed.
So this appropriation could be handled also by the Interior
Appropriations Committee.
By contrast, the proposed funding would also take a
considerable amount of time to establish. The sources and
mechanisms for this fund can't be done overnight. Also, there
is no incentive to create this fund. We think that by providing
some incentives, like tax incentives to help fund this
development fund, it would be a great enhancement.
We also think that by asking for a study by the GAO, it
will help to quantify the true need of this program. What we
need to do is look at how do we increase incentives into the
new markets tax program.
Finally, we commend your efforts in working with the Senate
Finance Committee. We think that repealing the essential
governmental function test for tribal taxes and bonds is
essential. We urge, I urge this Committee to consider
introducing a Senate companion bill to H.R. 4943. This bill is
pending in the House and we are looking for enactment this
year.
As to Section 4, amending the Buy Indian Act, the National
Center has long sought for the expansion and updating of this
program. At our workshops that we have at our reservation
conferences, we have talked to the Bureau of Indian Affairs and
they have been there to really support the Buy Indian program.
We urge that the Indian Health Service also be in the room,
also be a part of the Buy Indian program. We think it is
important. So we urge that the Indian Health Service also look
at adopting rules similar to what the BIA has.
We think the departments should also set up annual
percentage goals when they do utilize the Indian Procurement
Act, when they buy goods and services from Native-owned
businesses.
Finally, on Section 6, reauthorizing and amending the ANA
programs, I am glad to see that the recommendations that I
provided last year to this Committee when you had your
testimony that access to capital has been translated. It also
prioritizes ANA so that they can get involved in social and
economic development grants for groups like Native CDFIs and
other important projects like COACH, tribal programs, tribal
master plans and identifying the unique tribal business
structures. We think that it is good that ANA is involved and
we urge the ANA to prioritize and provide technical assistance
for grantees.
I want to say thank you to this Committee. I also want to
say thank you, Chairman, for acknowledging Mr. Davis. He
decided to move on, so from the National Center, we wish him
well. He has done a great job for the National Center. So we
stand for questions. Thank you, Mr. Chairman.
[The prepared statement of Mr. Watchman follows:]
Prepared Statement of Derrick Watchman, Chairman, National Center for
American Indian Enterprise Development
Chairman Barrasso, Vice Chairman Tester, and members of this
distinguished Committee, I am Derrick Watchman, Chairman of the Board
of Directors of the National Center for American Indian Enterprise
Development, and a citizen of Navajo Nation. Thank you for inviting me
to testify at this important hearing to present the views of the
National Center on S. 3234, the ``Indian Community Economic Enhancement
Act of 2016.'' As stated in our letter of support for S. 3234, we
commend you and the staff for the care and innovative thought that went
into distilling years of testimony and recommendations presented by the
National Center, other national tribal and native organizations and
leaders of Indian communities across the country, and then producing
this legislative proposal to spur business and economic development in
Indian Country. The measure responds favorably to many of the National
Center's recommendations presented to this Committee in hearings and
listening sessions over the years to enhance programs and better target
them to address Indian Country's unique sovereign and business
characteristics, capabilities, and access to capital challenges.
As you know, the National Center has successfully provided business
and procurement technical assistance for nearly 50 years to Indian
tribes, Alaska Native regional and village corporations, Native
Hawaiian Organizations, and enterprises owned by these entities or
individual members of these communities. For this broad constituency,
the National Center also hosted Reservation Economic Summits (RES) for
30 years and has advocated for policies to advance Indian business and
economic development interests. We have appreciated working in
partnership with the Committee and national tribal and other native
organizations to support important initiatives of the Committee on
energy, business and economic development especially. We applaud the
Committee's bipartisan, effective leadership in spearheading toward
passage of S. 209, the Indian Tribal Energy Development and Self-
Determination Act Amendments of 2015, and for developing business and
economic development legislation in the form of Chairman Barrasso's
bill, S. 3234, co-sponsored with Senator McCain, and Vice Chairman
Tester's bill, S. 3261. These bills contain innovative responses to the
drumbeat of recommendations that have been presented in oversight
hearings and some Committee listening sessions hosted at our RES
conferences. As background for my testimony today, I have referred to
the National Center's views presented at: the Oversight Hearing on
``Economic Development: Encouraging Investment in Indian Country'' on
June 25, 2014; the Committee's ``Listening Session on Economic
Development'' at RES Wisconsin on October 9, 2014; the Oversight
Hearing on ``Indian Country Priorities for the 114th Congress'' on
January 28, 2015; the Committee's Listening Session on ``Buy Indian Act
and Community Development Financial Institutions'' on June 16, 2015;
the Oversight Hearing on ``Access to Capital in Indian Country'' on
June 17, 2015 (when I testified in my personal capacity as a former
banker, and the hearing was streamed into RES DC for hundreds of our
conference participants to see); and the Committee's Listening Session
on the President's FY 2017 Budget Requests on February 17, 2016.
Comments on S. 3234
In previous hearings and listening sessions, the National Center
has repeatedly called for actions that S. 3234 proposes to advance,
including elevating and enhancing the Office of Native American
Business Development reporting directly to the Secretary of Commerce,
augmenting support for the Indian Loan Guarantee Program, and for the
Community Development Financial Institutions (CDFI) Fund bond guarantee
program to help more Native CDFIs. The bill also addresses Buy Indian
Act implementation issues we have raised, and moves toward achieving
parity in the tax treatment of tribal governments' bond financings.
Below are specific comments.
Section 2. Findings
Overall, we agree with the thrust of the findings. Some important
points, raised at numerous hearings, should be added. Paragraph (1)(A)
lists several barriers that must be overcome, such as lack of
infrastructure or capacity and lack of sufficient collateral. To that
list, ``lack of sufficient capital'' should be added. Paragraph (5)(B)
noted that access to private capital for projects in Indian communities
may not be ``realized'' but the word ``available'' would be more
appropriate. In paragraph (7), we recommend revising it to read: ``(7)
there are a number of federal loan guarantee programs available to
facilitate financing of business, energy, economic, housing, and
community development projects in Indian communities, but those
programs may be oversubscribed or not yet fully used; and''. As the
National Center has testified repeatedly, the Indian Loan Guarantee
Program has been woefully underfunded, resulting in backlogs of
financings that could not be timely completed because the credit
subsidy for the guarantees was exhausted well before the end of the
last two fiscal years. our views on the FY 2017 Budget Requests noted
the omission of any funding request for the Indian Energy Loan
Guarantee Program. We were delighted that Senator Franken was
successful in adding credit subsidy funding in the Energy
Appropriations bill for FY 2017 to implement the Indian Energy Loan
Guarantee Program if that measure becomes law. The Department of
Agriculture's loan guarantee program also lost ground in the FY 2017
requests.
Section 3. Native American Business Development, Trade Promotion, and
Tourism Act of 2000
As mentioned earlier, the National Center has long advocated for
elevating and enhancing the Office of Native American Business
Development headed by a Director reporting directly to the Secretary of
Commerce, as contemplated in the enactment of the Native American
Business Development, Trade Promotion, and Tourism Act of 2000 (Public
Law 106-464, referenced herein as the ``2000 Act''). We have made this
request every time the National Center has testified before this
Committee over the last 10 years at least.
The Department of Commerce operates so many agencies and programs
that could benefit Indian communities, and link them with opportunities
domestically and globally. It is essential that Commerce embrace that
challenge by supporting the Office of Native American Business
Development! Yet, from 2000 to 2005, Commerce disregarded the
directives of the Act, and those of another passed in 2000, the Indian
Tribal Regulatory Reform and Business Development Act. In mid-2005,
Commerce's Minority Business Development Agency (MBDA) paid some
attention, as noted in our June 25, 2014 testimony, with the MBDA
Director assuming the title of Director of the Office of Native
American Business Development and allocating about $200,000 for an
experienced Native American to be hired, develop a business plan, and
begin fulfilling the requirements of the two statutes enacted in 2000.
Three Native Americans, successively, held that position, with the
latter two also designated at the Senior Advisor to the Secretary on
Native American Affairs. The last ``Senior Advisor'' was housed in the
Inter-Governmental Affairs Office and had to split his time between
Indian Country initiatives and many other, unrelated responsibilities.
To be effective, the Director's sole focus should be on the Office of
Native American Business Development, with its own budget and some
staff to assist with full implementation of the duties prescribed in
the Act and the amendments to it proposed in S. 3234.
Mr. Chairman, the National Center commends you and your staff for
responding to our recommendations. We strongly support Section 3
provisions that define the ``Director'' of this Office, elevate the
Office by placing the Director in the Office of the Secretary of
Commerce, and enhance the Director's authority to coordinate the
activities of Commerce and other key departments, to be actively
involved in policy, and to ensure timely assistance and consultation
with Indian tribes regarding the policies, programs, assistance and
activities, as required by the Act. This legislation, coupled with
needed action in Commerce Appropriations bills to make funds available
for the Office within the Departmental Management budget, have long had
the support of at least a dozen national and regional native
organizations.
The National Center also supports the provisions of Section 3(d)
that would add a new section 8 to the Act to require the Director to
coordinate with the Departments of the Interior and the Treasury
(acting through the Administrator of the CDFI Fund) on the development
of certain ``initiatives'' that encourage, promote, and provide
education regarding investments in Indian communities through (1) the
Indian Loan Guarantee Program, (2) the CDFI Fund and Native CDFIs, and
(3) other capital development programs. Additional important
``initiatives'' would include examining and developing alternatives
that would qualify as collateral for financing in Indian communities,
and identifying regulatory or legal barriers to increasing investment,
including qualifying or approving collateral structures, in Indian
communities.
There are two provisions of Section 3(d) that the National Center
would like to see revised, however. First, in the new section
8(a)(1)(C) proposed to be added to the Act, we suggest some expansion
of the directive to provide ``entrepreneur and other training relating
to economic development through tribally controlled colleges and
universities''--no doubt valuable curricula for these educational
institutions. The National Center knows the importance of this training
for Indian Country, and therefore hosts our national and regional RES
conferences and our Native Edge webportal to provide a vast array of
entrepreneurial and other training relating to economic development.
Other Indian organizations also provide such training. For many years,
Commerce's MBDA supported some of this training, as part of
entrepreneurial and business assistance, under cooperative assistance
agreements for operating Native American Business Enterprise Centers
(NABECs). The National Center and other Indian organizations operated
NABECs across the country, until MBDA withdrew that support in favor of
funding ``MBDA Business Centers'' only. The point here is that, if S.
3234 becomes law and new initiatives involve funding of entrepreneurial
and other training relating to economic development, other Indian
organizations--in addition to tribally controlled colleges and
universities--should be eligible for such funding opportunities.
Second, Section 3(d) proposes to add a new section 9 to the Act
that would establish an ``Indian Economic Development Fund'' in the
Treasury of the United States. The intended purpose of this Fund would
be to augment the existing credit subsidies of the Indian Loan
Guarantee Program (25 U.S.C. 1481) and to establish a credit subsidy
solely for any eligible CDFI that applies for financing under the CDFI
Fund bond guarantee program and whose investment area includes an
Indian reservation or whose targeted population includes an Indian
tribe. The National Center has long urged Congress to augment the
credit subsidy supporting the Indian Loan Guarantee Program--to which
Congress can and should respond by increasing the amount it
appropriates for that line item in the annual Interior Appropriations
Act. We have testified repeatedly that adding just $7.5 million more
for the program would double the value of the private loan financings
that could be made for business and economic development projects in
Indian Country! Such a relatively small increase could be deployed
immediately to leverage about $250 million in private sector loans. In
2006, Congress recognized the importance of the program by increasing
the aggregate value of guaranteed loans from $500 million to $1.5
billion. Funding the Indian Loan Guarantee Program is a federal
obligation, and Congress can and must act now to increase this line
item in the FY 2017 Interior Appropriations Act.
While the National Center supports the proposed purpose of the
Fund, we are concerned about the time it would take to establish the
Fund, the mechanism proposed for deposits to the Fund, and the lack of
any identified incentives that would attract such deposits to generate
at least $7.5 million to augment the Indian Loan Guarantee credit
subsidy, and amounts specified for the CDFI Fund bond guarantee
program. A more helpful interim step would be consideration of an
Indian Economic Development Feasibility Study (perhaps by the
Government Accountability Office) to quantify and assess the past use
and allocation, and feasibility of expanding, incentive programs to
facilitate and increase business, economic, energy, housing, community
and infrastructure development in Indian communities--specifically the
following: the New Market Tax Credits; the Low Income Housing Tax
Credits; the Indian Employment Tax Credits and Accelerated Depreciation
provisions; the Investment Tax Credit; and Renewable Energy Tax Credit
and other energy-related tax credits. The study also could assess the
feasibility of providing a tax credit, with a value equivalent to the
New Market Tax Credit, to entities investing in an ``Indian Economic
Development Fund'' for the purposes proposed in S. 3234.
Our final comment on Section 3(d) relates to its provision defining
``Tribal Government Functions'' such that ``the essential governmental
functions of an Indian tribe shall be considered to include any
function that may be performed or financed by a State or unit of local
government with general taxing authority.'' The National Center
supports the underlying purpose of this provision as generally
consistent with our repeated testimony advocating tax legislation to
eliminate the restrictive ``essential governmental function'' test for
tribal tax exempt bond issuances, and to provide fairer tax treatment
of tribal governments in parity with state and local governments. Now
pending in the House of Representatives is bipartisan, non-
controversial legislation, H.R. 4943, the Tribal Tax and Investment
Reform Act of 2016, that would amend the necessary provisions of the
Internal Revenue Code to accomplish these and other objectives. We join
the Indian tribes, national tribal and other organizations in urging
the members of this Committee to consider introducing a Senate
companion bill, and supporting enactment of this important tax
legislation before the 114th Congress adjourns.
Section 4. Buy Indian Act
As noted earlier, the National Center has advocated for
strengthening and expanding the Buy Indian Act's reach. Our June 25,
2014 testimony recounted how National Center leaders called on this
Committee back in 1987 and 1990 hearings to broaden use of Buy Indian
Act authority beyond the BIA and IHS to other federal agencies that
expend funds for the benefit of American Indians and Alaska Natives.
Together with other Indian organizations, we urged the Department of
Interior to promulgate modern-day regulations (after a 100-year delay).
We submitted public comments urging the Department to establish a 100
percent goal for utilization, monitor compliance, and report annually
on the extent of utilization and amount and value of contracts awarded
to Indian-owned economic enterprises. Subsequently, the National Center
has hosted many RES conferences with workshops on Buy Indian Act
implementation, inviting both BIA and IHS, but only BIA speakers have
attended. We hope that Section 4 will spur IHS officials to dedicate
far more attention to their Buy Indian Act obligations by adopting
updated regulations along the lines of BIA's new rules, using the
authority in far more procurements, and showing up when they are asked
to speak about the status of their implementation efforts.
We are gratified that Section 4(b) includes provisions to require
greater use, with the presumption that Buy Indian Act authority will be
used for procurements, unless the Secretary of the Interior and or the
Secretary of Health and Human Services determines such use to be
impractical and unreasonable. We also appreciate the provisions in
Section 4(c) to improve implementation by requiring the Secretaries to
conduct outreach to Indian industrial entities, provide training,
require BIA and IHS regional offices to aggregate data regarding
compliance with the new provisions, require procurement management
reviews that include assessment of implementation, and consult with
Indian tribes and other stakeholders regarding methods to facilitate
compliance with the Act and other small business or procurement goals.
And, we are delighted that Section 4(d) requires, as we had
recommended, that the Secretaries submit reports to this Committee and
its House counterpart containing information on the names of agencies
making Buy Indian procurements, the types of purchases from and
contracts with Indian economic enterprises, description of the
percentage increase or decrease in total dollar value and number of
purchases and awards made within each agency region (as compared to the
preceding fiscal year) from Indian and non-Indian economic enterprises,
and any administrative procedural, legal or other barriers to achieving
the purposes of Section 4, together with recommendations for
legislative or administrative actions to address those barriers. To
this list should be added the requirement to determine an annual
departmental goal for the percentage of awards that will be made in the
coming year using Buy Indian Act authority.
Section 5. Indian Trader Act
As the National Center has not been involved with any efforts to
update, revise or otherwise deal with this 1876 Act, we respectfully
defer to others who may wish to offer comments on this section based on
their substantive knowledge of the subject matter.
Section 6. Native American Programs Act of 1974
When I testified at this Committee's oversight hearing on ``Access
to Capital in Indian Country'' on June 17, 2015, I was asked to discuss
the elements that I believe are essential for facilitating access to
capital in Indian Country and what some of the roles are that the
Federal Government, tribal governments, and bankers can play to improve
access to capital. I mentioned, for example, that tribal access to
capital can be facilitated by tribal uniform commercial codes or
similar ordinances, good tribal court systems with commercial dispute
resolution mechanisms, planning (including business plans, feasibility
studies, master plans), among other financial elements (sophisticated
financial management, etc.). I also spoke about traditional banking
institutions, native owned banks, and the increasing numbers of Native
CDFIs operating across Indian Country. The National Center frequently
has voiced support for increased funding for the Native CDFIs, and for
the Administration for Native Americans (ANA) that administers the
grant program amended by Section 6. The section proposes to reauthorize
ANA's grant programs through FY 2021, make Native CDFIs eligible to
apply for ANA's economic development program grants, prioritize
economic development grants for certain types of applications, and
prioritize any technical assistance for grantees and applications
submitted under this session. Given the identified need, it makes sense
to encourage the ANA to support grants to develop (1) tribal codes and
court systems relating to economic development, (2) nonprofit
subsidiaries and other tribal business structures, and (3) tribal
master plans for community and economic development and infrastructure.
However, Section 6 would reauthorize ANA's funding only at current
levels, and many Indian tribes, other tribal entities and Indian
organizations should be able to compete on a level playing field for
grants in these priority areas. If funding were increased for ANA's
grant programs, there would be more leeway to prioritize ANA's funding
and technical assistance for Native CDFIs, or for development or
maintenance of CDFIs, including training and administrative expenses,
beyond that which already may be available from the CDFI Fund for such
Native CDFI development-related activities.
Comments on S. 3261
The National Center also supports enactment of S. 3261, the
``Native American Business Incubators Program Act'' that responds
favorably to requests of the National Center and other native
organizations over the years for Congress to create a business
development program tailored specifically to Indian Country's unique
sovereign and business characteristics and capabilities, and focused on
incubation and access to capital challenges. During the 1990s, the
Small Business Administration (SBA) provided about $5 million per year
to support Tribal Business Centers, but that funding ended in 2001.
Subsequent efforts were persistent but unsuccessful in moving
legislation to authorize creation of a Native American small business
development center program within SBA. Then, in 2012, as I noted
earlier, MBDA decided to end the cooperative assistance agreements it
had funded NABECs' operations. So, since 2012, there has been no
federal program support focused on Native American entrepreneurial and
business assistance, incubation and mentoring of tribes and Native
Americans striving to start and grow their business enterprises. S.
3261 presents an innovative response to this urgent need.
Conclusion
Again, I thank the Committee and staff for working collaboratively
with the National Center to encourage Indian Country stakeholders to
think about, articulate and offer up policy recommendations and then
develop the proposals discussed at this hearing to enhance Indian
community economic development. Since our organization's launch in
1969, National Center leaders have worked to ensure that Indian-owned
businesses, whether tribal member startups or major enterprises, have
the opportunity to acquire entrepreneurial skills, receive business
assistance and training, meet potential business partners, and receive
procurement technical assistance to become capable of competing in
private and public marketplaces, both nationally and internationally.
The National Center supports S. 3234, with our suggested amendments, as
important to galvanize key departments and agencies to work much more
proactively with Indian communities and their economic enterprises. We
look forward to working with the Committee, its staff and others to
perfect the language and move toward enactment to advance business and
economic development in Indian Country.
The Chairman. Thank you very much for your testimony.
We will start with Senator Hoeven.
Senator Hoeven. Thank you, Mr. Chairman. I would like to
thank all the witnesses for being here today and direct my
first question to Cheryl Andrews-Maltais.
In your testimony, you discussed the Department's support
for S. 3261, which creates grants to establish and maintain
business incubators for Native American entrepreneurs. In my
State of North Dakota, we have the North Dakota Indian Business
Alliance, which is a joint venture between our Department of
Commerce, the State's Department of Commerce, and the Indian
Affairs Commission, which is also an agency of North Dakota.
The idea is to strengthen Native entrepreneurs by building
working relationships to enhance their developing.
My question is, in your opinion, is there flexibility in S.
3261 to partner with State or regional agencies or groups and
try to leverage their help? Is that in the legislation? Or is
there something else we should do to try to make sure that that
is possible in order to create that leverage?
Ms. Andrews-Maltais. Well, I do have one of our subject
matter experts with us, Jack Stevens. But what we are asking
for as part of our testimony is to work with the Committee to
improve the flexibility for implementation, so that it works,
it provides more flexibility than what the bill currently has.
If you'd like any more greater detail with that, I can have
Jack come up and answer that question with more specificity, if
that would help.
Senator Hoeven. That would be great, if you have something
to add.
The Chairman. Could you please start by identifying
yourself for the record?
Mr. Stevens. Yes, sir, Mr. Chairman and members. I am Jack
Stevens, the Acting Director of the Office of Indian Energy and
Economic Development, Department of the Interior.
The question, sir, I believe in the bill that there is
broad eligibility for groups to apply for these grants. Some of
the private entities that you mentioned that are affiliated
with tribes could actually apply to become incubators
themselves.
Senator Hoeven. Good. We are always working to try to come
up with resources, whether it is at local, State, Federal,
tribal level. So we have to find some way to pool our
resources. I am hopeful this bill will help us do that.
My other question is for Mr. Watchman. We have seen some
success in our State with tribes adopting the Uniform
Commercial Code, UCC. That helps investors mitigate risk in
lending to tribes, it helps tribal businesses gain financing,
develop credit. But we have found that not all the tribes
utilize the Uniform Commercial Code, and that can create
confusion and uncertainty for investors.
So in your opinion, what can be done to encourage tribes to
utilize the UCC as a way to create more certainty and hopefully
more business development?
Mr. Watchman. Thank you for the question. I am the Chairman
of the National Center, but before this, I was a lender with
Chase Bank. So I did a lot of commercial lending in Indian
Country. One of the big things was uniformity.
Senator Hoeven. Yes, then you know what I am talking about.
Mr. Watchman. I know exactly what you are talking about.
The big issue, as a former banker, is that you have over 580-
plus or 60 different tribes, so in essence, you have over 580
different systems. So one of the things, as a former banker,
was how do we get consistency. So I strongly urged, and in
fact, as a member of the Navajo Nation, the Navajo Nation is
also looking at a uniform commercial code system. But it needs
to be something that everyone can adopt. I strongly think that
it is important so that on the investor side, the investor
understands that, in this case, it is hard to say, but we need
one system that fits all. It is similar to what the States
have, they do have a uniform commercial code, so you can go
from one State to the next and you know that you have
certainty, you have things that are written.
So as the Chairman of the Board for the National Center, I
think it is important to have one system. There could be some
changes per tribe, but it is very important, so that when we
have a lender or investor, they understand that you do have,
for example, you do have a place to hear your dispute, you do
have a place, if there is a bankruptcy, you know what the
issues are. So from the National Center, although it is a
challenge, I think a system that all tribes adopt would be the
best, so that lending, credit, agreements can take place. So
the issue that we are dealing with is, if there is a dispute,
how do you resolve the dispute. This UCC system would certainly
address that. So that has been my experience.
Senator Hoeven. Is the Navajo Nation the largest by number
of members of any of the tribes? Or is that not the case? I
know it is a very large tribe, isn't it?
Mr. Watchman. One of the largest tribes, but I guess that
depends on each day. But yes, we are one of the larger tribes.
Senator Hoeven. Obviously, if you could work something out
to adopt the UCC, that would be a big step. Thank you very
much. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Hoeven. Senator Udall?
Senator Udall. Thank you, Mr. Chairman. Let me welcome
Derrick Watchman. Thank you for your testimony, all the
witnesses today. Thank you, Derrick. I have known you for
years. You come from a family with a long history of public
service. You not only have extensive background in banking and
economic development that is here, but you have been CEO of the
Navajo Nation Gaming Enterprise, you have also been chief of
staff to the Navajo Nation and served as the Director of Indian
Affairs at the Department of Energy. So we appreciate you and
your family and the long public service.
When you were talking, Mr. Watchman, about the set-aside
provisions in the Buy Indian Act, and you talked, I think,
specifically that there should be specific targets, do you have
in mind a specific number, a percentage? And could you tell me
why you think it would be better to put a specific target in
the legislation?
Mr. Watchman. Mr. Chairman and Senator Udall, I think
targets are important. Otherwise, as a former official at the
Department of Energy, one of the things I was trying to do was
to get all the others, there's billions and billions of dollars
in all these departments. So if you don't have a target, there
is no goal. If you strongly urge that you need to buy from
Native Americans, it is not going to happen.
I was just talking to the Navajo Nation Washington office
this morning. They told me, make sure you say, at least 15
percent, at least 15 percent of all purchases should be from a
Native-owned business or a Native-owned concern. I don't have
the right answer, but at least that is a target. So every year,
when these departments get their budgets, they have to start
looking at, how much should I utilize from Indian America,
Indian business America, for this.
So I think targets are important. I am not sure what the
number is, but I will go with what the Navajo Nation
recommended to me this morning, 15 percent of all the annual
purchases should come from Native American-owned businesses and
concerns. That is one suggestion, Senator.
Senator Udall. Thank you, Derrick, very much.
Cheryl, could you also address this issue? As you know,
Section 6 of the Indian Community Economic Enhancement Act of
2016 has a Buy Indian Act provision to consider in terms of
procurement. I would like to see this Buy Indian Act be
stronger. As you know, in many of the Federal statutes, as he
has alluded to, if we have a set-aside for whether it is
veterans or small business or those kinds of things, it is much
stronger. Do you have a specific goal or target? Does the
Department have a position on setting a target for agencies to
award a percentage of contracts to Indian-owned businesses?
Ms. Andrews-Maltais. Specifically underneath the Buy Indian
Act, 100 percent of the acquisitions performed by the
Department are supposed to be considered tribally-owned. So the
goal is 100 percent wherever we can. So a percentage, in our
opinion, would basically limit, or be contrary, to the role
that we are looking at today overall.
Now, if we are saying to a percentage, limit that goal to
tribal entities and remaining amounts to IEEs, then that would
also be contrary to the competitive basis of the nature of how
the bills are set up and how they are used in trying to
contract for reasonable prices. So I am not exactly sure what
the aspect of a percentage goal is, because the goal is 100
percent. The Department itself is trying to promote and
encourage contracting and acquisitions of tribally-owned
businesses.
Senator Udall. Thank you very much for that answer. I am
pleased to see the Department supports S. 3261. We have these
high unemployment rates, as you know. Regardless, if enacted
this Congress, we need boots on the ground on a persistent
basis, working with tribes and relevant stakeholders to really
get tribally-owned businesses going. I hope I can get your
commitment from you or the Assistant Secretary to come to New
Mexico and meet with Pueblos and tribes including the Navajo
Council of Economic Advisors, to share best practices and work
with us to foster entrepreneurs in Indian Country.
I hope I can get your commitment on that.
Ms. Andrews-Maltais. Absolutely. We are happy to work with
the Committee and the tribes to be able to really help
invigorate economic development for the tribes themselves.
Senator Udall. Thanks very much. Thanks for your service.
I yield back, Mr. Chairman.
The Chairman. Thank you, Senator Udall. Senator Daines?
Senator Daines. Thank you, Mr. Chairman.
The conversation in my office recently, Bill Snell of the
Rocky Mountain Leaders Council, which is based in Billings,
Montana, shared how important it was that lenders feel more
comfortable in doing business with tribes, and if they have
better assurances that there is a legal recourse should any
bumps along the road arise.
Unfortunately, lenders don't currently have that comfort in
Montana, and I am guessing in other States around our Country.
It is a detriment, frankly, to the economies in Indian Country.
Ms. Andrews-Maltais, in studying the barriers to lending on
reservations, it appears that unfamiliarity with tribal laws,
because each has their own uniqueness, may cause conventional
lenders to almost freeze up because of the uncertainty. Do you
agree with that and could you share any insights to that point?
Ms. Andrews-Maltais. There are several factors that seem to
preclude lenders and conventional financial institutions from
working with tribes. Some of it has to do with their lack of
familiarity. Some of it has, with tribes that do have
standardized codes that they can rely on, some of it has to do
with their lack of understanding that there are significant
opportunities in Indian Country. And part of it is that you
have tribes that are at varying stages of their governmental
process. So those that are in positions that have significant
advantages to either having the in-house expertise are able to
reach out, and that number is small, where the overwhelming
majority doesn't have those capacities. Therefore, having
legislation like this and working with the Federal Government
and the tribes and the Administration to develop some sort of
uniform codes I think would be really advantageous for anybody
involved to make people aware that not only do these
opportunities exist, there are codes, there are codes that can
actually, these outside entities can rely upon. It elevates
both Indian Country and their neighbors as well.
Senator Daines. I also wonder, is there a little of the
chicken and egg here? In other words, does some of this
uncertainty come from the fact that some of these lenders,
frankly, just haven't done business in tribal communities
before?
Ms. Andrews-Maltais. Yes, a lot of it is because nobody has
done business in Indian Country. But you also have to take into
consideration that although the tribes have had our governments
and we have continued being prosperous since time immemorial,
underneath this new structure of government that we work
currently, it is rather new. So these opportunities are kind of
new for outside entrepreneurs and/or financial institutions to
recognize.
Senator Daines. There is a recent study that was conducted
by the University of Arizona, regarding increasing access to
capital and credit in Native communities. It recommended that
the best way to spur economic growth in Indian Country is for
the Federal Government sometimes just flat out get out of the
way. In fact, let me read a quote from the report. It says, ``A
reduction in Federal bureaucracy is like to generate the most
revenue and capital for tribes.''
Ms. Andrews-Maltais, would you agree with that
recommendation?
Ms. Andrews-Maltais. To an extent, I have to say that it
does make sense. There are several models that are currently
within the Federal system that are a good way of demonstrating
that. Within the IRA, the Section 17 corporate structure, the
tribes negotiate and develop their own corporate structure
internally and bring that to the Federal Government for the
Secretary of the Interior to in fact approve so that there is a
structure by which the tribes can go into business partnerships
with non-tribal entities.
Additionally, another model that is similar to that, that
allows the tribes the flexibility and sovereignty to negotiate
their own deals is through the compacting underneath the
gaming, underneath the Indian Gaming Regulatory Act, where the
tribes and their partners and the States negotiate their
agreement. And then the Federal Government basically approves
that, stepping out of the way of being too involved but yet
standing as an advocate and protecting the rights and interests
of the tribes so they are not taken advantage of as well.
Specifically when tribes may not have the particular expertise
internally to protect themselves.
Senator Daines. So it is certainly probably a mixed bag?
Ms. Andrews-Maltais. I believe so.
Senator Daines. In your opinion, what are some of the
places or programs that you see where the Department of the
Interior might be able to change, scale back, streamline the
approach to make the bureaucracy less burdensome for tribes?
Ms. Andrews-Maltais. I think that is part of the challenge
that we are offering to work with Congress and the tribes in
order to develop a really strong program that can be
universally applied through Indian Country on a broad base, and
then bring those specifics into the individual negotiations of
contracts between the individual 567 tribes that we do have.
Senator Daines. Thank you for your very articulate answers.
I appreciate it. Mr. Chairman, I yield back.
The Chairman. Thank you, Senator Daines. Senator Heitkamp?
STATEMENT OF HON. HEIDI HEITKAMP,
U.S. SENATOR FROM NORTH DAKOTA
Senator Heitkamp. Thank you, Mr. Chairman. I want to start
out by talking a little bit about impediments to lending, one
of which obviously is collateral. Kind of traditional way that
you would envision a mortgage or a business loan, go to the
bank, you can put the land up as collateral. In the case of
tribal entities, and certainly certain individuals, the Federal
Government, because they retain title, has created an
impediment to traditional lending. Would you agree with that,
Ms. Andrews-Maltais?
Ms. Andrews-Maltais. We have found that it has been a
challenge and there have been a few lending institutions that
have actually stepped forward to work with tribes, and
understand the complexities of the land in trust versus being
able to use that as collateral. But we do have a lot of subject
matter experts within our Department that would be happy to sit
down and go over the specifics of how best to approach this,
and/or bring more of their particular expertise through their
experiences with the challenges that tribes have brought to
them that might be a little bit more appropriate.
Senator Heitkamp. From my experience, one of the best
outlets is working with a local community banker who lives in
the community. Probably works very closely every day with
members of the tribe. We have one banker in North Central North
Dakota who has done many, many home mortgages on trust land. He
has never had a foreclosure, in part because that is what
community banks do, they engage in relationship banking. I
think that the more we can work with community banks to create
programs that give them the certainty, the better we are going
to be in terms of providing capital, get that capital right at
home.
That is why I really applaud both the Chairman and the Vice
Chairman for introducing bills that look toward
entrepreneurship, look toward building that business ability.
Because we know in today's world, we can do a lot of things in
rural America and tribal America if we just have the resources
and the infrastructure.
The concerns that I have are that every agency seems to
have a program. I think you would get my tribes in North Dakota
to say that USDA has been almost more significant of a partner
in economic development than any other Federal agency, because
USDA provides the lending for infrastructure.
One of the concerns that we have been talking a lot about
is the lack of infrastructure, whether it is broadband, whether
it is just roads and bridges, whether it is hospitals, whether
it is schools, and what impact that has on business
development. So it is not that we can just look at business
development or adopting a UCC or doing all of those things that
will guarantee to lenders that there is rule of law. The
question is, what is it that people want to do.
And it seems to me that, Mr. Watchman, that there is a real
wealth of information in Indian Country that doesn't get
disbursed very well, that we don't apply best practices in
terms of tribal development and tribal member development. How
do we bridge that? How do we have a broader platform for all
the good things that are happening, so that they can be shared
in ways that could achieve broader economic development goals
for all tribes?
Mr. Watchman. Mr. Chairman and Senator, that is a tough
question. But from the National Center, we have periodic
reservation economic summits. It is a big forum and venue to
bring all the different parties together to talk about the
success stories and things that are happening in Indian
Country. Indian economic development and community development
has been a challenge, whether it is access to capital, the
availability of land, the varying rules and regulations in law.
So it is a big challenge. I know that our group, along with
the other national Indian organizations, we do try to bring all
the different parties together and talk about the success
stories. And we do showcase that. We have an annual reservation
economic summit conference, and we try to highlight all the
good things, whether it is someone who acquired a huge loan or
someone who was able to create a business, or has a lot of
jobs. It is just more communication and all of us working
together.
Yes, there are over 567 different tribes. But the forums
that are out there, we need to communicate more. That is what
we do with the National Center. We try to highlight, again.
So there is challenge in everything.
Senator Heitkamp. I am out of time, but I think it would be
interesting, from that gathering, to do a look-back. What were
the obstacles? What were the biggest impediments that
successful Indian businesses have had? And how do we overcome
those kind of in a generality? Because we won't be able to
attack all of them. But to get at these impediments that could
be limiting everybody uniformly I think would be pretty
critical.
But entrepreneurship, it seems to me that if we are going
to grow tribal America, we have to start at home.
The Chairman. Thank you, Senator Heitkamp. Senator Tester?
Senator Tester. Thank you, Mr. Chairman. This is for you,
Cheryl. Between 2010 and 2014, BIA contracting was between 7
percent and 13 percent. You had said that the Buy Indian Act
goal should be 100 percent. That is a pretty good gap.
Do you have any intermediate steps or goals that might make
this more attainable?
Ms. Andrews-Maltais. That is certainly the goal, of 100
percent, and I have to agree, that is a big gap. But in, I
think, I am not sure, I believe that Jack would be much more
appropriate to respond to that.
Senator Tester. With the Chairman's consent, Jack can
answer that question.
The Chairman. Go ahead.
Mr. Stevens. Jack Stevens, once again, Mr. Chairman and
Senators.
The answer to the question is that we have, the default
position is Buy Indian. As a manager who does procure, I can
tell you that we enacted new regulations last year. Since that
time, the default position, as I say, is Buy Indian. That means
that anything, any type of purchase, if we don't buy Indian, we
have to justify it. So immediately, we look for Indian vendors.
This is a new culture in the Administration.
Senator Tester. That is good. What level are you at now as
far as buying Indian?
Mr. Stevens. We really don't have a fix on what has
happened since the regulations were enacted. But I think you
are going to see that when the statistics are gathered, you are
going to see a much higher increase than 15 percent.
Senator Tester. All right. When will you have the
statistics?
Mr. Stevens. [No audible response.]
Senator Tester. It should be pretty easy, quite frankly,
because I am sure you have a database of expenditures. Could
you just get me that information? That would be great.
Cheryl, and this not only could go to Cheryl, it could go
to any of the tribal leaders, the issue of sovereignty is a big
issue in Indian Country. And it is a real issue and it is an
issue that is important to Native Americans, I know for a fact,
because I hear about it a lot.
You have a situation where, and it is not with all tribes,
just some tribes, where investors and business do not feel like
they have adequate recourse through the courts because there is
a lot of turnover when there is a turnover on the Council.
Oftentimes the courts turn over too.
Is there a solution for this? Because I think part of the
bill, 3261, part of its goal is not only to work with
entrepreneurs, but also work with tribes, to let them
understand from a business perspective what kind of
infrastructure they need to put in place to be successful.
Could you touch on that a little bit? Because I think if we
are impeding upon sovereignty, it is over with, it isn't going
anywhere. By the same token, there are some things we can do to
help move forward. And I can give you examples of tribes who
are very successful in business, because there is
predictability, and ones that aren't successful at all, because
there is a lack of predictability.
Ms. Andrews-Maltais. Sovereignty does play a very large
role. Each tribe has the ability to waive their sovereignty,
depending upon what the tribal constitutions or structures
provide for for businesses. That is also one of the reasons why
we wanted to work with the Committee and the drafters, in order
to develop something that is more universal that tribes can
elect. Because by exercising their sovereignty, they can elect
to participate in something or not participate. By having some
sort of universal codes or structures for trade and commerce in
Indian Country, that should be able to alleviate some of the
concerns that these investors have.
But it is complicated, but it is certainly something that
the Department, as well as the tribes and obviously the
Committee is committed to finding some sort of resolution on
this.
Senator Tester. It is good. I mean, the thought has
occurred to me and this is off topic for what we are doing
today, with entrepreneurship, but the thought has occurred to
me that if there was some sort of sharing of information
between the tribes on what each tribe is doing that they have
been very successful at, maybe through one of the tribal
organizations, it could be a big help.
Along those same lines, training personnel for technical
assistance for entrepreneurship is critically important. Are
there enough resources being provided right now for Native
entrepreneurs?
Ms. Andrews-Maltais. There is never enough money in Indian
Country to do what it is that we need to do. However, with the
resources that we have, we have been putting as many, training
as many people as we can. But this incubator bill, as it is, we
are hoping that by utilizing not only the resources in the bill
to set up the incubators themselves, but part of those
agreements would also include the training for other people to
learn how to help impart business knowledge that is necessary
and use this as a starting point to develop more and more
people for technical assistance.
Senator Tester. Yes, I just think it is really, really
important. We do it off-reservation all the time. In Montana,
for example, with unemployment on the reservations north of 50
percent, on most if not all, and sometimes significantly north
of 50 percent, I think it could be good. Thanks for your
testimony.
Harvey, you guys are in the same boat as the Little Shell
in Montana. There are some things with recognition that are
obvious, access to programs, that can help your tribe. Are
there things that we are not thinking about, if you were to get
recognition, that would help your tribe and tribal members,
other than the programs you would have access to at the Federal
level?
Mr. Godwin. Thank you, Senator Tester. I would like to say
first that you spoke earlier about public education and how
important it is. My wife is a school teacher, art teacher in
high school. My mother is a retired school teacher, for 33
years. She is 90 now. My sister is a school teacher, all my
aunts and uncles are school teachers. And that was the
educational saving grace for our family, and for many families,
because of our origin from 1888, from Indian Normal School.
But for the Lumbee, we are a little bit fortunate in the
line of questioning you are asking now. Because we have Lumbee
Bank, that has been in place since the early 1970s. And
entrepreneurs, Lumbee tribal entrepreneurs, started this bank
in the early 1970s, and they have a great lending relationship.
That is what my background comes from, is partnerships. You can
turn your tribal council over, but if you create true business
partnerships, that is going to stand the test of time, no
matter who is on the council or who is not.
The Lumbee Tribe has recently partnered with Campbell's
Soup to start a Lumbee tribal community garden in our culture
center. And we partnered with Wal-Mart for the first time, to
help us with our pow-wow. So there are business partners out
there that we have been fortunate to partner with on our own.
But with full Federal recognition, that would certainly
leverage by many times over for the Lumbee Tribe to be able to
build on the relationships that we currently have.
The Little Shell Tribe is, I think, known as the Homeless
People, have been for a long time. They have been in the
acknowledgement process for 28 years. Well, between 1888 and
1956 was 68 years. I am sad to say right today, is the 60 year
anniversary since the 1956 bill.
I guess what hurts a lot is, you start talking about
cultural self-esteem, where your membership doesn't feel like
they have opposition. Other tribes oppose us to this
recognition. We used to say, it is about the money. It is about
the money. I don't think I believe that anymore. I think it is
a little bit about discrimination, because federally-recognized
tribes don't see the Lumbee as real Indians. And that is
hurtful. It is traumatic, and it is very hurtful to our people,
to our children coming up. They look at each other and say,
well, there is a real Indian, because they're from another
tribe that is federally-recognized.
Growing up like I was, you watch a western and you want to
be the cowboy instead of the Indian. Because we have been
denied our true identity.
I go back to the Civil War. And you have seen the film,
Lincoln. In that movie, there was a place that was talked about
a lot, Fort Fisher, a fort in North Carolina, where I am from,
an hour and a half from Fort Fisher. Still stands today. During
the Civil War, our people were challenged by the U.S.
Government that wanted to annihilate us with the rest of the
southerners in the Confederacy. And the Confederacy was
kidnapping our young people, our young men, and driving them as
free labor to Fort Fisher. Malaria, getting shelled on, getting
killed with the Confederate soldiers.
And if you go there today, there is not one sentence there
about the Lumbee people and their forced labor there. See, we
have overcome those kinds of challenges. We have overcome
discrimination from other tribes. We have overcome not being
fully federally-recognized on 1956 because we made the decision
that we were going to decide who were are.
Senator Tester. Thank you. Thank you all for your
testimony. I appreciate it very, very much. I have already used
twice as much time as I was allocated, and I appreciate the
Chairman giving me that flexibility. Thank you.
The Chairman. Thank you, Mr. Vice Chair.
Mr. Watchman, the ISAC proposes to create this Indian
Economic Development Fund. We talked about it, the fund would
allow tribes to voluntarily contribute to the Treasury to
establish the credit subsidy for eligible community develop
institutions that then financially serve the Indian
communities. This idea isn't new.
What types of incentives can you think of beyond just good
will that you think would make it attractive for tribes to
continue to contribute to this kind of proposed fund?
Mr. Watchman. Mr. Chairman, thank you for the question.
There are a couple of incentives that come to mind. Obviously
you have the tribes that have some resources to invest. There
are maybe some other concerns, so perhaps some tax credits for
those relationships that tribes have with businesses. In my
area we deal a lot with the coal mining companies, the oil and
gas companies. So perhaps some type of tax incentive or credits
for them if they do invest in such a fund.
On the tribal side, since tribes are tax-exempt, a tax
credit won't be beneficial. But that is the one thing that
comes to mind, is a tax credit for a related entity to get some
type of reduction in taxes. That is the first thing I can think
of.
That is probably all I have at this point, that is the big
thing. You need to look at those partners that do have
resources available.
The Chairman. The Buy Indian Act, and then the Small
Business Section 8(a) program require purchases of goods and
services, as you know, from Indian and other minority
businesses under certain circumstances. Some of the businesses
that qualify as a Buy Indian Act business may not qualify as an
8(a) business and vice versa.
So the Department of the Interior has recommended adding
language to S. 3234, the ICE bill, to allow reporting of Buy
Indian Act actions through the Section 8(a) program. How do you
think that those two procurement requirements should be
reconciled? What do you think we ought to do about that?
Mr. Watchman. I am familiar somewhat with the 8(a). So it
is a program where a small, Indian-owned concern can give its
designation and you have a time period. Once you reach a
certain amount in sales, then you graduate and move into a
different program. So there is a lot of reporting behind that.
To be simply an Indian-owned company, obviously you have to
verify that you are Indian-owned. So there are data bases,
there are ways to track these programs. I think it is possible.
The biggest issue, from my experience, is that in all these
programs, and I have it too, we have all these folks that are
out there charged with purchasing. So a lot of them have, not
their favorites, but they know what is reliable. So to go and
find a new vendor, that is always a challenge. You have to test
them to make sure they are reliable, they have enough capital.
If it is Indian-owned, do they have enough capital, do they
have loans? If they need a loan, is it backed by an Indian loan
guarantee? So it is the reliability of these companies.
But there are ways to track it. When I was involved at the
Department of Energy at one time, we were working on how to
track that. So by having the data in front of all these folks
that are in charge with million dollar contracts to say, this
is the possibility, I think it will work. By tracking, it gives
them recognition so they say, even though there is a
suggestion, if you have a mandate, you have to buy Indian, I
think that is one step in many that could be done.
The Chairman. Cheryl, anything you would like to add on
that?
Ms. Andrews-Maltais. Exactly. That is one of the reasons
why we are looking to add additional language, to incorporate
the 8(a), and also maybe broaden that through, beyond the
Indian Health Services and the Department as an option. I agree
totally with the tax credits. We would be happy to provide some
recommendations, or additional recommendations to reach that
goal of trying to make it comport, or balance with the Buy
Indian Act. The specificity of the standard the companies have
to maintain doesn't always comport with them being able to be
included in that data. That is one of the reasons why we wanted
to broaden that definition's perspective.
The Chairman. Vice Chairman McDarment, in your written
testimony, you talk about the physical location and description
of your reservation. The Tule River Indian Tribe's reservation
is situated on the western foothills of the Sierra Nevada,
mountains near the Sequoia National Forest. Can you explain how
placing these 34 acres of land into trust is going to benefit
your tribe? Number two, is the nearest town supporting the
placing of this land into trust?
Mr. McDarment. There is no opposition from the neighboring
town. The benefit to the reservation by acquiring these 34
acres is that it is the main entrance to the reservation. There
are a couple other entrances, on the very top of the
reservation, which are inaccessible during the winter time, or
even just certain parts of the year. So it is the main paved
entrance to the reservation.
The Chairman. Thank you.
There are no other questions for today. Members may still
submit follow-up written questions that you may receive over
the next week or so. The hearing record will be open for two
weeks. I want to thank all of you for being here today, for
your time and your testimony.
The hearing is adjourned.
[Whereupon, at 4:06 p.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of Neal McCaleb, Ambassador at Large, Chickasaw
Nation
My name is Neal McCaleb, Ambassador at Large for the Chickasaw
nation and former Assistant Secretary of the Interior for Indian
Affairs. I appreciate the opportunity to submit this testimony relative
to SB 3234 (ICE) and to enthusiastically support the intent and
language of this legislation.
While I endorse each and every section of the proposed Bill as
needed and effective remedies to the substandard economic environment
in ``Indian Country''. My comments will deal specifically with Section
4 on the ``Buy Indian Act'' which has a one hundred year history of
Congressional affirmation however it has been ineffective implemented
to the detriment of Indian enterprise and individual economic and
social advancement.
The Government Accounting Office in its report to Congress in July
of last year on the implementation of the ``Buy Indian Act'' made it
abundantly clear that the Department of the Interior has fallen far
short of Congressional intent for the application of this long standing
legislation and unique purchasing authority. This Act seeks to improve
the extent of the application of the Buy Indian Act in Section 4 a
systematic biannual report to Congress on the efficacy and extent of
the Departments use of this Act.
The current regulations for the application of this authority are
limited to Bureau of Indian Affairs and the Indian Health Service or
other agencies and divisions of the Interior Department that maybe
authorized at the discretion of the Secretary of Interior. So far this
discretion has not been extended beyond the BIA in Interior
notwithstanding the clear authority to apply it, if not the obligation
to ensure implementation of the Buy Indian Act to all Agencies, Bureaus
and Offices of the Department of the Interior that have a direct impact
Indian Tribes.
The secretary of Interior has identified several agencies in
Interior which have a Trust responsibility to Indian Tribes. These are
the Bureau of Land management, Bureau of Reclamation, Fish and Wildlife
Service and the National Park Service.
I propose that this legislation be amended to include direction to
the Secretary of Interior to apply the Buy Indian Act to all agencies
within the Department of Interior which impact Indian Tribes and/or
exercise Trust responsibilities to individual Indians.
This provision to expand the application of the buy Indian Act will
have salutary effect of Tribal economies and individual Indian economic
enterprise. From my personal experience in the mid 1970s I witnessed a
remarkable upsurge Indian owned professional engineering and
architectural practices when the BIA division of Construction and
Maintenance in Albuquerque began to apply the Buy Indian Act to the
acquisition of professional design services which are exempted from
competitive bidding by the ``Brooks Act''. The Buy Indian Act is one of
the few business development mechanisms that applies equally to
individually owned Indian Economic Enterprise as well as Tribally owned
enterprises and its expansion will stimulate greater investment and
opportunity in Indian Country.
Thank you for the privilege of submitting these brief comments on
this important legislation.
______
Prepared Statement of Leonard Smith, Executive Director, Native
American Development Corporation (NADC)
Introduction
Chairman Barrasso, Vice Chairman Tester and members of this
Committee, my name is Leonard Smith and I am the Executive Director of
the Native American Development Corporation (NADC), located in Billings
Montana. I thank you for the opportunity to present testimony on Native
American economic development issues. My comments today focus primarily
on S. 3234, and its provisions, however, our NADC Board supports the
intention and scope of both S. 3234 and S. 3261. From our Board's
perspective both bills seek to address needed funding and programs in
Indian Country to better promote successful business development
opportunities.
The NADC is a non-profit corporation that provides a range of
training, technical assistance and capital services to Tribes, Tribal
enterprises and individual American Indian Communities and firms in
Montana, Wyoming, and North and South Dakota. Some of the services NADC
provides includes: housing, business start-up and expansion, project
financing/funding, business plans, feasibility studies, and project
management. NADC is a certified Native Community Development Financial
Institution (CDFI) established in 1996 by tribal enterprise business
managers in Montana and Wyoming in collaboration with the Montana
Indian Manufacturers Network Board of Directors.
I am an enrolled member of the Assiniboine Sioux Tribe of Fort Peck
Indian Reservation in northeastern Montana. I have a bachelor's degree
in Business Administration from Montana State University--Billings with
over 25 years of experience as a business owner, Chief Executive
Officer of a tribal enterprise, Deputy District Director of the Montana
Small Business Administration Office, Assistant Vice President of
Indian Credit Corporation, and Loan Officer of a Tribal Business
Development Office. Most of my career has been in the realm of Native
or Tribal economic development.
Comments on S. 3234 the Indian Community Economic Enhancement Act of
2016
Indian Loan Guarantee Program: As the National Center testified,
the Indian Guarantee Loan Program has been underfunded and delays make
the program not useful to those who need quick or immediate assistance
for their business. We saw that the FY 2017 Presidential Budget Request
omitted any increase to the funding of the Indian Energy Loan Guarantee
Program. And the Department of Agriculture's loan guarantee program has
also lost ground. We believe credit subsidy funding found in Energy
Appropriations for FY 2017 for the Indian Energy Loan Guarantee program
may provide relief, but we believe the only real fix will be more
direct appropriations for loan guarantee programs that benefit Indian
Country.
Buy Indian Act: NADC has been instrumental in the Rocky Mountain
and Great Plains service area in the support and strengthening of the
Buy Indian Act. In May of 2010, NADC organized an economic development
and procurement conference with top level Bureau of Indian Affairs
(BIA) staff in attendance. A Buy Indian Act breakout session was on the
agenda with many local contractors in attendance. These contractors
raised questions directly to the BIA officials on the lack of a
required regulatory process for the use of the Buy Indian Act thereby
rendering it useless to them. This discussion contributed to tribal
consultations with the BIA nationwide in developing regulations for the
Buy Indian Act. By July 2012 regulations were in the Federal Register
and being implemented. As a Regional Procurement Technical Assistant
Center NADC has worked closely with the BIA Rocky Mountain Regional
procurement staff to promote and support Indian Economic Enterprises.
The Bureau of Indian Affairs has made progress in strengthening the Buy
Indian Act and we hope that the Indian Health Service will follow suit
by adopting updated regulations similar to the BIA's. NADC appreciates
the language included in Section(s) 4(b)-(d), we believe the Buy Indian
Act could work as a socio-economic set-aside as a Procurement goal with
the U.S. Small Business Administration applicable to all federal
agencies. In addition technical assistance and an educational campaign
for Indian Economic Enterprises and Federal Government employees should
be developed for implementation of the procurement goal.
Native American Business Development, Trade Promotion, and Tourism
Act of 2000: The NADC strongly supports elevating and enhancing the
Department of Commerce Office of Native American Business Development
by making its Director report directly to the Secretary of Commerce. It
is important that this Office have the authority to coordinate the
activities of Commerce and other key departments, to ensure timely
assistance and consultation with Indian Tribes. This is especially true
to assist with the administration of the CDFI Fund programs that
encourage investments in Indian Country. We also support the
establishment of an Indian Economic Development Fund in the Treasury of
the United States. The purpose of the fund would be to increase the
existing credit subsidies of the Indian Loan Guarantee Program and
provide subsidy solely for any eligible CDFI that applies for financing
under the CDFI Fund bond guarantee program. We are concerned however,
that a study of the mechanism to support these increases would only
delay badly needed funding, the need for this funding has already been
studied and found severely lacking. We therefore recommend direct
appropriation to ensure funding. A small increase in funding could
leverage millions in private sectors funds.
Native American Programs Act of 1974: We support the purpose and
goals of S. 3234; which are to increase access to capital for Tribes
and Indian businesses, increase opportunities for Indian business
promotion and create mechanisms and tools to attract businesses to
Native communities.
S. 3234 seeks to provide a permanent waiver of cost sharing for
Native CDFIs, require Tribal consultation regarding increasing
investment in Native communities, and provide a requirement between the
Secretaries of Treasury, Interior and commerce to coordinate between
agencies in the development of Indian Country programs.
The economic conditions on the reservations in Montana, Wyoming
North and South Dakota cause many challenges for Native businesses. The
reservations experience persistent poverty (double the statewide
average), and unemployment rates three to five times the state average.
And poverty rates for Native Americans in Montana were at 30 percent in
2010, triple the state rate of 9.7 percent. A significant restraint for
economic growth and development in Native American communities has been
a lack of access to capital and credit.
Because they are such important economic engines in the markets
they serve, Native CDFIs in the Great Plains and Rocky Mountain Regions
are constantly looking for increased access to operating and lending
capital to be able to expand their services to their customers. Native
American Development Corporation is proud to be one of four Native
CDFIs operating in Montana. We are a certified CDFI that provides loans
and equity-like loan products to businesses owned by, serving, and
creating jobs for Native American people on and off the reservation. We
also provide technical assistance to Native business owners to help
them be more successful entrepreneurs and to access government
contracts.
Native CDFIs have become vital to building and sustaining Native
Communities' local economic momentum and represent a key private sector
approach to Native Nation self-sufficiency. Native CDFIs are private-
sector, financial intermediaries with community development as their
primary mission. They are market-driven, locally-controlled, private-
sector organizations. CDFIs measure success by focusing on the ``double
bottom line:'' economic gains and the contributions they make to the
local community.
In the short term, Native CDFIs are filling the credit and capital
gaps in Indian Country left by traditional lenders and investors. In
the long term, they are grooming Native consumers, entrepreneurs, and
potential homebuyers to access traditional lenders in the future. They
have been working to create innovative solutions to overcome economic
development barriers, and they have proven themselves as vehicles
towards developing healthy, vibrant Native economies and communities.
They have entered markets normally considered ``high-risk'' and have
been responsible for an astounding transformation--serving as the
catalyst for developing local economies, building assets, and reducing
persistent poverty.
NADC strongly supports making CDFI's eligible to apply for
Administration for Native American's (ANA) economic development program
grants, prioritize economic development grants for certain types of
applications and prioritize any technical assistance for grantees and
applications submitted under this legislation. We support the Bill's
intent to encourage ANA to support grants to develop, tribal codes and
court systems relating to economic development, non-profit subsidiaries
and other tribal business structures, and tribal master plans for
community and economic development and infrastructure
Comments on S. 3261 the Native American Business Incubators Program Act
The NADC has long supported programs that foster and support Native
American small businesses. NADC has been able to implement funding
partnerships with the Montana Indian Business Association and various
agencies to provide start-up and expansion services to Native owned
businesses in Indian country. NADC therefore endorses S. 3261 for its
innovative response to the great need to foster Native businesses and
entrepreneurs. S. 3261 would establish a program in the Office of
Indian Energy and Economic development under which the Secretary of
Interior would provide financial assistance through competitive grants
to eligible applicants for the establishment and operation of business
incubators that serve reservation communities. The legislation would
allow various eligible applicants including non-profit organizations
that could provide services to Native business and Native
entrepreneurs, a vision long shared by NADC.
Conclusion
Thank you for the opportunity to submit testimony to the Committee
on the issues that could have a tremendous impact on the future of
economic development in Indian Country. We look forward to working with
the Committee in the future to address significant provisions and to
advance enactment of both S. 3234 and S. 3261.
______
Prepared Statement of William Snell, Executive Director, Rocky Mountain
Tribal Leaders Council
The Rocky Mountain Tribal Leaders Council (RMTLC) is an eleven-
member tribal association comprised of tribal governments from Montana,
Wyoming and Idaho. Its mission is dedicated to improving the health,
economic development and education for tribes and their members through
a variety of programs, policy recommendations, and tribal leaders'
meetings. The RMTLC also endeavors to coordinate the similar interests
of member tribes through various collaborative initiatives and
projects.
I would like to take this opportunity to thank Senator Jon Tester,
Senator Maria Cantwell and Senator Tom Udall for the introduction of
Senate Bill 3261--The Native American Business Incubators Program Act.
As with other racial and ethnic groups, economic opportunity and
prosperity are major drivers to the social, educational and political
stability of Native Americans. Every senator on this committee is very
well aware of the multiple challenges facing Indian Country in their
pursuit of small business ownership and entrepreneurship. But we are
not without hope, for conditions can be established and sustained by
which new and existing American Indian entrepreneurs can be successful.
While we as tribal governments and as a people have been
geographically and culturally isolated, we seek economic development to
not only uphold our political sovereignty but also our cultural
sovereignty. Indian Country need not be forced to choose between
dependent poverty or middle class assimilation. Rather we seek to
determine our own economic future and note that all labor has dignity
and importance. None of us should believe that what we do does not
matter or what we do only matters.
The overriding concern that presents itself in Indian Country, and
what this legislation seeks to address, is the absence of fully
functioning economies on far too many reservations. This is caused by
an absence of small businesses and the fact that Indian Country owns
private businesses at the lowest per capita rate for any ethnic or
racial group in the United States. Notwithstanding the positive
economic developments in Indian Country since the advent of Indian
gaming, one need not have to travel to third world countries to
experience third world hunger, poverty, disease, addiction, housing,
medical care, or unemployment. They exist here in the states that you
call home. They are your islands of poverty amidst a sea of plenty. We
all breathe the same air--can't we all be afforded the same chance?
While economic opportunity should be afforded to all Americans, an
examination of this legislation and the historical economic literature
and lessons involving Native American entrepreneurs also reveal unique
impediments in starting, locating and operating a business. While
noting that the journey of a thousand miles begins with single step we
applaud the sponsors of this legislation for highlighting the need to
address the lack of access to capital, geographic isolation, the need
for educational development and technical training, measuring and
enforcing accountability through oversight, poor physical
infrastructure, networking opportunities, and the all too often
difficult state regulatory interaction with tribal governments and
tribal members.
In addition to the above, in order for entrepreneurial endeavors to
be successful, a few key issues need to be continually reinforced and
highlighted today as we move forward on the problem this legislation
seeks to address. These include the need for first rate research that
gives us solid evidence of what works and what does not in this effort.
We cannot continue to fly blind as we are forced to choose among the
alternative spending constraints that the two political parties have
annually sought to enforce on one another, for all too often it is
those who exist in the shadows of our society that disproportionately
suffer most from these alternative budgetary realities.
What is extremely important for this legislation is that government
leaders need a new and more mentally rigorous way to make decisions
about the success or failure of public policy initiatives and the need
for more public policy experimentation. As has been noted before by
renowned management consultant W. Edwards Deming that ``if you can't
measure it you can't manage it.'' In order to have an impact on the
long term challenges facing Indian Country, more must be done to drive
resources toward high-impact solutions that get results. Indian Country
greatly needs evidence, we need data, we need investment in research so
that we can enforce accountability and demonstrate effectiveness for
our people. We need to focus on outcomes and lives changed, rather than
simply compliance and numbers served. Then we will be able to tell our
children success stories. Then we can elevate hope and we can provide
them a way out of this cycle of poverty and despair. Then we can much
like the first United States Attorney General to visit a Native
American reservation, when asked in an interview shortly before he was
killed what he would like his obituary to read he replied. . .''I would
like to feel that I had done something to lessen the suffering of
children.''
We know that faith is taking the first step even when you can't see
the whole staircase. Having faith and taking risks are necessary
components to economic success but those risks must be informed and
evidence-based risks. We know that no matter how lofty or how common
one's profession is, one should do it with honor and pride. But we
refuse to believe as Dr. King stated that there are insufficient funds
in the great vaults of opportunity in this nation. This incredibly
bountiful country has the resources but there have always been other
more immediate or emerging priorities. We are still waiting like Chief
Joseph to be brothers of one father and one mother, with one sky above
us. We will proceed on this essential journey with you, for change is
what dominates our world. We know more than any other people that
unless we move with change we will become its victims.
Thank you for the honor of allowing me to appear before you today
and to hear my words of truth to you. I am available for any questions
you might have.
______
Prepared Statement of United South and Eastern Tribes Sovereignty
Protection Fund
The United South and Eastern Tribes Sovereignty Protection Fund
(USET SPF) is pleased to provide the Senate Committee on Indian Affairs
(SCIA) with testimony for the record of its legislative hearing on: S.
2285, the Lumbee Recognition Act, S. 3234, the Indian Community
Economic Enhancement Act of 2016, S. 3261, the Native American Business
Incubators Program Act, and H.R. 4685, the Tule River Indian
Reservation Land Trust, Health, and Economic Development Act. The
following testimony will address three of the four bills, as USET SPF
defers to others with greater knowledge on H.R. 4685, especially the
Tule River Tribe of California.
USET SPF is a non-profit, inter-Tribal organization representing 26
federally recognized Indian Tribes from Texas across to Florida and up
to Maine. \1\ USET SPF is dedicated to enhancing the development of
Tribal Nations, to improving the capabilities of Tribal governments,
and assisting member Tribal governments in dealing effectively with
public policy issues and in serving the broad needs of Indian people.
---------------------------------------------------------------------------
\1\ USET SPF member Tribal Nations include: Alabama-Coushatta Tribe
of Texas (TX), Aroostook Band of Micmac Indians (ME), Catawba Indian
Nation (SC), Cayuga Nation (NY), Chitimacha Tribe of Louisiana (LA),
Coushatta Tribe of Louisiana (LA), Eastern Band of Cherokee Indians
(NC), Houlton Band of Maliseet Indians (ME), Jena Band of Choctaw
Indians (LA), Mashantucket Pequot Indian Tribe (CT), Mashpee Wampanoag
Tribe (MA), Miccosukee Tribe of Indians of Florida (FL), Mississippi
Band of Choctaw Indians (MS), Mohegan Tribe of Indians of Connecticut
(CT), Narragansett Indian Tribe (RI), Oneida Indian Nation (NY),
Passamaquoddy Tribe at Indian Township (ME), Passamaquoddy Tribe at
Pleasant Point (ME), Penobscot Indian Nation (ME), Poarch Band of Creek
Indians (AL), Saint Regis Mohawk Tribe (NY), Seminole Tribe of Florida
(FL), Seneca Nation of Indians (NY), Shinnecock Indian Nation (NY),
Tunica-Biloxi Tribe of Louisiana (LA), and the Wampanoag Tribe of Gay
Head (Aquinnah) (MA).
---------------------------------------------------------------------------
The Indian Community Economic Enhancement Act of 2016
For years, USET SPF and Tribal Nations and organizations across the
country have called for legislation to address numerous barriers to
comprehensive economic development in Indian Country. That is why we
were pleased to learn of Chairman Barrasso's introduction of S. 3234,
the Indian Community Economic Enhancement Act of 2016 (ICE). USET SPF
extends our appreciation the Chairman for his willingness to take on
the expansive and substantial issue of economic development, and fully
supports the intent of S. 3234.
We support many of the provisions within S. 3234, as well. The
permanent waiver of matching funds for Native Community Development
Financial Institutions (CDFIs) is long overdue and a welcome provision
in the bill. USET itself is in the process of establishing the first
Native CDFI to service its entire region, and the permanent waiver will
be of enormous assistance to this effort. In addition, we welcome the
opportunity for Native CDFI's to access grants through the Native
American Programs Act that would provide CDFI's with the opportunity
for development and maintenance, and allow them to provide assistance
to Tribal Nations in the development of Tribal law and court systems,
as well as Tribal master plans.
Repeal of the ``essential government function'' test in the Tribal
issuance of tax-exempt bonds is a critical step forward in the pursuit
of parity within the tax code for Tribal Nations. USET SPF strongly
supports this provision.
We also offer our support for the elevation of the Director of the
Office of Native American Business Development. Providing direct access
from this position to the Secretary of Commerce will assist in the
removal of some of the barriers described in the ``Findings'' section
of the bill.
Further, USET SPF is supportive of amendments to the Buy Indian Act
that would require the Bureau of Indian Affairs and the Indian Health
Service to certify that procurement from Indian businesses is not
practicable before purchasing outside Indian Country. We also look
forward to the issuance of a biannual report from the Departments of
Health and Human Services and Interior regarding the implementation of
the Buy Indian Act.
While USET SPF believes that S. 3234 provides a variety of much
needed change in policy and law, we note that there are a number of
opportunities for improvement within the bill as introduced. With this
in mind, we support the testimony provided by the National Center for
American Indian Enterprise Development, and others, including the
Native American Finance Officers Association. In addition, we provide
the following section-specific comments designed to strengthen ICE's
impact for Tribal Nations:
Section 2. Findings.
While the Findings section as drafted does describe many
existing barriers to economic development in Indian Country,
USET SPF notes a major omission: taxation. Through inequities
in the tax code as well as state dual taxation, revenue
generated within Indian Country continues to be taken outside
its borders or otherwise falls victim to a lack of parity.
Moreover, Tribal governments continue to lack many of the same
benefits and flexibility offered to other units of government
under the tax code. We strongly encourage the addition of
language within the Findings section that acknowledges and
seeks to lift these deep inequities. For your consideration, we
propose the addition of the following:
(1)(A) The U.S. Constitution vests the Congress with the
authority to regulate commerce with the Indian tribes.
(B) Under its Indian commerce authority, the Congress has
enacted federal laws promoting Indian self-determination,
economic development, and strong tribal governments.
(C) Promoting Indian self-determination requires that the
Secretary of the Interior recognize the tribal governments'
authority to regulate and license business entities and
commercial activities within Indian Country.
(D) Achieving Indian self-determination will not be possible
until barriers to economic development are eliminated.
[The current Findings subsection (1)(A) would be renumbered
(2)(A) (and the subsequent numeration would change accordingly]
[With regard to the barriers to economic development in
Findings subsection (1)(A) (now numbered (2)(A)), USET SPF
recommends inserting new roman numerals iv and v (and renumber
current iv as vi) as follows:
iv. The uncertainty of case-by-case adjudication has invited
conflict with other governments over regulatory authority and
impeded the development of tribal capacity to regulate
commercial activity and exercise sovereign authority over
fiscal policy in Indian Country.
v. Lack of jurisdictional clarity often exposes business
activity to multiples layers of regulation, assessment and
costs.
Section 3. Community Development.
Again, while USET SPF supports much of the language in this
section, we note the absence of additional provisions addressing issues
related to taxation. Although we recognize that the addition of a high
number of taxation provisions could have resulted ICE being referred
outside of SCIA's jurisdiction, we reiterate the urgent need for
comprehensive tax reform in Indian Country. The provision repealing the
``essential government function'' test for tax-exempt bond financing
appears in a much larger Indian Country tax reform bill on the House
side, H.R. 4943, the Tribal Tax and Investment Reform Act, a bill that
does not currently have a companion in the Senate. As such, we urge
SCIA to work with the Senate Finance Committee on the introduction of a
companion bill for possible inclusion in ICE.
In addition, we strongly recommend the inclusion of an amendment to
the Native American Business Development, Trade Promotion, and Tourism
Act like that which was included in H.R. 4699, the Indian Country
Economic Revitalization Act, introduced by Rep. Suzan DelBene during
the 113th Congress. H.R. 4699 requires a regular report from the
Secretary of Commerce that includes:
--data on Indian business development and employment during the
preceding 3-year period, except for the first report which is
to include data from the preceding 10 years;
--an assessment of existing structural advantages and barriers
to the economic development of Tribal Nations and lands;
--an analysis of Indian access to adequate infrastructure,
affordable energy, educational opportunities, and investment
capital; and
--recommendations on legislation to strengthen the economies of
Tribal Nations and lands in areas that include regulatory, tax,
and trust reform.
This type of data would provide a more accurate picture of the
status of economic development in Indian Country, which would aid in
advocacy efforts, as well as provide the Administration and Congress
with the opportunity to understand how policy affects Tribal Nations
and areas for improvement.
Section 4. Buy Indian Act.
As a part of the reporting described under this section in ICE,
USET SPF recommends regional, in addition to national, reports.
Regional reporting would provide the type of information needed for
Tribal Nations and organizations, like USET SPF, to work with regional
offices to increase implementation of the Buy Indian Act amendments.
Section 5. Indian Trader Act.
USET SPF recommends amendments to the Indian Trader Act to reflect
the Federal Government's commitment to the policy of Indian Self-
Determination and in order to address changes in the manner in which
commerce and government regulation operate in Indian Country since the
Act was passed in 1876. Additionally, the delegation of congressional
authority to the executive branch should be updated to reflect that the
Department of Interior no longer employs a ``Commissioner.'' USET SPF
proposes the following amendment to Section 5 of the Act of August 15,
1876 (the Indian Trader Act), which would replace the existing
legislative language:
(a) IN GENERAL. The Secretary of Interior shall have the sole
power and authority to regulate trade and commerce on Indian
lands and to make such rules and regulations as necessary to
promote Indian commerce and maximize the generation of revenues
in Indian Country.
(b) SELF-DETERMINATION--With the approval of the Secretary of
Interior, Indian tribes shall have the authority under
subsection (a) to enact tribal laws to govern licensing, fees,
assessments, taxes and other charges with respect to trade and
commerce on Indian lands.
The Native American Business Incubators Program Act
S. 3261, the Native American Business Incubators Program Act, would
establish a grant program to provide financial assistance for the
establishment and operation of business incubators serving Tribal
communities within the Department of the Interior. The growth and
diversification of Native businesses within Indian Country is critical
to economic sovereignty, self-determination, and Nation rebuilding. We
agree that Native business owners face unique and greater barriers to
economic success than many of their peers. USET SPF strongly supports
this legislation as an opportunity to create jobs and strengthen Tribal
economies, particularly in the USET SPF region. We further support the
necessary authorization of funding for this program and appreciate
attempts to ensure that S. 3261 is not implemented at the expense of
other equally necessary programs at Interior. We thank Vice Chairman
Tester for the introduction of this legislation and look forward to its
enactment.
The Lumbee Recognition Act
USET SPF, as indicated through previous Congressional testimony and
organizational resolutions, supports the use of the Federal
Acknowledgement Process (FAP), administered by the Department of the
Interior, for determining whether Indian groups should be federally
recognized. This method, based upon criteria recommended by the
American Indian Policy Review Commission, provides for an orderly
process, administered by experts, such as ethno-historians,
genealogists, anthropologists, and other technical staff.
On October 23, 1989, William Lavell, Associate Solicitor for Indian
Affairs, issued an opinion stating that federal law bars the Lumbee
group from going through the FAP process due to the June 7, 1956 Lumbee
Act. The Act prohibits the Lumbee from receiving, ``any services
performed by the United States for Indians because of their status as
Indians.'' With this in mind, USET SPF strongly supports legislation
that would overturn this prohibition, if necessary. This would allow
the Lumbee to access the FAP, from which they have been unfairly
excluded.
In the past, Congress has considered and rightly rejected numerous
Lumbee recognition bills. USET SPF encourages Congress to again reject
Lumbee recognition via Act of Congress in S. 2285. Rather, Congress
should consider legislation that would offer a fair remedy to the
barriers created by the 1956 Lumbee Act, and allow Lumbee recognition
to be reviewed by the Department of the Interior.
Conclusion
USET SPF appreciates the opportunity to submit testimony on these,
and other bills, before the SCIA. We remain committed to working with
the Committee to preserve, protect, and advance the sovereignty of
Tribal Nations within the USET SPF region and across the country.
______
Response to Written Questions Submitted by Hon. Al Franken to
Derrick Watchman
Impediments to small business development in Renewable Energy Sector
Senator Franken, as you know from my testimony at the Committee's
hearing on September 7, 2016, I serve as Chairman of the Board of
Directors of the National Center for American Indian Enterprise
Development. All of the National Center's Board members and staff have
long been dedicated to removing impediments and enhancing opportunities
for business development in Indian Country, including improving access
to capital so desperately needed for investment in business, economic
and energy development in Indian communities across the United States.
As I noted in my testimony on September 7, we at the National
Center applaud your developing and securing approval, with bipartisan
support, of your amendment to the FY 2017 Senate Energy and Water
Appropriations bill to provide $9 million to fund the Tribal Energy
Loan Guarantee Program. As you note in your question, this $9 million
could be leveraged into $50-85 million worth of private sector loans
for energy projects in Indian Country. The National Center is anxious
to see this $9 million come to fruition as soon as possible in Omnibus
appropriations for FY 2017, or if not, then in FY 2018.
As to your questions about working with small businesses working in
the renewable energy sector in Indian Country, about the impediments to
deploying renewable energy in Indian Country, and our recommendations
to Congress to address those impediments, below are responses based on
my years as Native American Policy Advisor to the Secretary of Energy
(1999-2001) and National Center Board member (2002-Present):
1. Access to Capital--Energy projects are capital-intensive,
especially renewable energy projects (e.g. wind, solar, photovoltaic,
hydropower, geothermal, etc.). The initiative to fund the Tribal Energy
Loan Guarantee Program at $9 million would help tribes, tribal
enterprises and other Native American-owned businesses attract private
loan financing, in addition to other types of investment, for some
renewable energy projects. Due to the large amounts of capital needed,
however, more funding for this program will be necessary. Also well
worth enhancing is the Indian Loan Guarantee Program of the Department
of the Interior, currently funded at only about $8 million (credit
subsidy of about $7 million) to leverage up to about $100 million in
private sector loans. To date, that guarantee program's aggregate loan
limit has not been sufficient to consider guarantees for a major energy
project (although a 2007 loan guarantee, made to an Indian borrower for
a portfolio of renewable and other energy projects, helped fund a gas
turbine generator). With a single commercial wind turbine costing about
$2 million, a wind farm of 50 turbines would consume the entire $100
million loan limit! Guarantees for funding wind and solar projects of
modest size might be possible, however, if the program's credit subsidy
could be increased by $9 million (similar to the program funding in
your Indian Energy Loan Guarantee amendment), which would increase the
aggregate loan limit to upwards of $250 million. As tribes look to
smaller renewable projects that could lower energy costs to their
tribal members, or that could generate utility rate payments that could
repay guaranteed loans, it would make great sense to add a modest $9
million to the existing Indian Loan Guarantee Program--a great program
that is currently oversubscribed and returns $15 for every $1 invested.
2. Capacity Building--Energy projects also are capacity-intensive,
requiring capabilities to obtain required licenses, permits,
environmental impact statements or assessments, leases, as well as
financing. Technical and regulatory knowledge is essential, and
familiarity with the energy industry is invaluable. Tribes need to
harness, recruit and/or spend time and money to obtain the expertise
needed to pursue energy projects. Congress made strides in years past
to authorize the Indian Energy Loan Guarantee Program and the Office of
Indian Energy to help build tribes' capacity to tackle energy
development, and this Congress finally came close to appropriating the
funding request for them. Congress also could be on the brink of
authorizing more regulatory reforms (e.g., Chairman Barrasso's Indian
energy bill, S. 209) to reduce regulatory burdens impeding Indian
energy project development, including by advancing Tribal Energy
Resource Agreements (TERA) to allow tribes more control in entering
into energy leases, business agreements and rights-of-way for
developing energy resources, whether renewable or nonrenewable. Part of
the TERA approval process involves determining a tribe's ``capacity''
to regulate energy development on its tribal lands. So, in addition to
getting these reforms enacted, it is essential for Congress to approve
additional funding for FY 2018 for grants for capacity building,
feasibility studies, and technical assistance, as well as other
financial assistance that may be available through the Department of
Energy's Office of Indian Energy Policy and Programs and the Department
of the Interior's Office of Indian Energy and Economic Development.
3. Partnership Collaborations--Tribes, tribal enterprises and
Native American businesses, of all sizes, can benefit greatly through
partnering with energy industry players, energy advisors, lenders,
investors, production companies, etc., whose representatives are
willing to collaborate to develop and deploy renewable energy or other
energy projects in Indian Country. We also recommend much more
collaboration among the federal agencies that have, and can play
larger, roles in assisting tribes and tribal members interested in
pursuing renewable and other energy projects. Key federal participants
should be the Departments of Energy, Interior, Agriculture/Rural
Development, Treasury, Commerce, and the Small Business Administration.
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