[Senate Hearing 114-99]
[From the U.S. Government Publishing Office]
S. Hrg. 114-99
ADVANCING ECONOMIC SUCCESS IN INDIAN COUNTRY
=======================================================================
FIELD HEARING
before the
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
MAY 27, 2015
__________
Printed for the use of the Committee on Indian Affairs
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COMMITTEE ON INDIAN AFFAIRS
JOHN BARRASSO, Wyoming, Chairman
JON TESTER, Montana, Vice Chairman
JOHN McCAIN, Arizona MARIA CANTWELL, Washington
LISA MURKOWSKI, Alaska TOM UDALL, New Mexico
JOHN HOEVEN, North Dakota AL FRANKEN, Minnesota
JAMES LANKFORD, Oklahoma BRIAN SCHATZ, Hawaii
STEVE DAINES, Montana HEIDI HEITKAMP, North Dakota
MIKE CRAPO, Idaho
JERRY MORAN, Kansas
T. Michael Andrews, Majority Staff Director and Chief Counsel
Anthony Walters, Minority Staff Director and Chief Counsel
C O N T E N T S
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Page
Field hearing held on May 27, 2015............................... 1
Statement of Senator Lankford.................................... 1
Witnesses
Kouplen, Sean, Chairman/CEO, Regent Bank; Chairman of the Board,
OneFire Holding Company........................................ 5
Prepared statement........................................... 7
Narcomey, Frank, President, Southwind Construction Services, LLC. 7
Prepared statement........................................... 9
Overal, Dottie, District Director, Oklahoma District Office, U.S.
Small Business Administration.................................. 15
Prepared statement........................................... 17
Ruttman, Dennis, CEO/Superintendent, Caddo Kiowa Technology
Center......................................................... 11
Prepared statement........................................... 13
Southard, Clark, Lieutenant Colonel (U.S. Army, Ret.); Executive
Director, Washita Valley Regional Partnership; Chairman,
Oklahoma Southwest Alliance; And Vice Chairman, Delaware Nation
Economic Development Authority................................. 18
Prepared statement........................................... 22
Appendix
Anderson, Michael G., Executive Director, Native American
Contractors Association, prepared statement.................... 40
Bills, Kay, Osage; Pamela Standing, Cherokee; and Kristi Daniels-
Long, Coeur d' Alene, joint prepared statement................. 65
Byrd, James K., Member, Muscogee (Creek) Nation, prepared
statement...................................................... 43
Citizen Potawatomi Nation, prepared statement.................... 35
Parton, Hon. Terri, President, Wichita and Affiliated Tribes,
prepared statement............................................. 41
Ray, James, Project Director, MBDA Business Center--Tulsa, Native
American and Alaska Native Program, prepared statement......... 65
Tiger, George P., Principal Chief, Muscogee (Creek) Nation,
prepared statement............................................. 44
ADVANCING ECONOMIC SUCCESS IN INDIAN COUNTRY
----------
WEDNESDAY, MAY 27, 2015
U.S. Senate,
Committee on Indian Affairs,
Anadarko, OK
The Committee met, pursuant to notice, at 4:30 p.m. in the
Anadarko High School auditorium, Hon. James Lankford,
presiding.
STATEMENT OF HON. JAMES LANKFORD,
U.S. SENATOR FROM OKLAHOMA
Senator Lankford. Good evening, everyone. I'd like to call
to order this field hearing of this Senate Indian of Affairs
Committee. Today we will receive advancing economics success in
the Indian Country. I'm very honored everyone is here. I'll
give a more formal introduction and preparation. But to begin
this evening Riverside School's color guard will now present
the colors.
Please rise.
[Ceremonial opening with the color guard.]
Senator Lankford. Thank you. You may be seated. Thank you
to the Riverside School for taking the time to be here with us
today for the color guard. I appreciate you being here. Let's
give them a clap here.
[Applause.]
Senator Lankford. Before we begin the hearing and this
testimony, I want to thank some of our hosts, Anadarko High
School, for allowing us to use the auditorium. Superintendent
Hackney, are you here, I saw you here earlier. I want to make
sure that--there she is right there in the back; and then
Principal Sparks as well, thank you for doing this. You're
trying to get everyone out of this building as summer time
begins and we're still bringing people in, so I appreciate you
here and for opening up this facility.
Also, thanks to the city of Anadarko for hosting us today.
It's been a great visit today. Got a chance to visit with Mayor
Eastwood, City Manager Corn, so many different Tribal Leaders
today through the entire area--thank you for what you have done
to make this day run smoothly.
And finally, I'd like to thank the staff of the Committee
on Indian Affairs for all the work that they have done. Many of
them are sitting behind me today and they work with the Senate
Committee. They are from all over the country, and it is
important to be able to be a part of this.
We have quite a few Trial Leaders that are also here today
that have been apart of this.
If you're a Tribal Chief, Chairman, Governor, or President,
or other leader--from the Tribal elective leader from the
tribes, would you please stand right now so we can recognize
you and thank you for being here.
[Applause.]
Senator Lankford. Thank you very much. Thank you for being
here.
A couple of weeks ago I sent a letter to Tribal Leaders in
Oklahoma asking them to submit for the record, testimony on
economic success they've achieved and roadblocks they're facing
to further success.
Thank you to those of you that have submitted. We have
received several of those, and thank you for that. Others that
would like to still submit those for the record, it is not too
late. I'm going to hold the official record open for the next
two weeks. Any tribe that would like to specifically list some
of their insights for the congressional record, I will leave
the record open for the next two weeks on that as well.
Also, I'd like to thank Secretary Chris Benge. As I
understand, Secretary Benge is also here, right there. Thank
you for being here as well, representing the state of Oklahoma.
So I appreciate you being here, Secretary Benge, as well.
There's still a lot of work to be done to ensure Native
American children grow up with the same opportunities as every
American child. Still a lot of uncertainty; the real definition
of sovereignty. And the best way for tribal government is to
both serve their citizens and the members and also be good
neighbors to the communities and states around them. There's
also a lot of work that's happening that's positive things
among our tribes and communities, especially here in Oklahoma.
Our tribes are a model for tribes around the country on
economic development, education, health care, and countless
other areas. Tribes in Oklahoma, led by many of the people that
are here today, contributed over 10 billion dollars to the
State economy. Many tribes in rural areas, the tribe is often
the largest employer, making very important contributions to
communities all over our state.
Economic development is not the solution to every problem
in Indian Country today. However, tribal governments and
individual Native Americans who find economic success are more
likely to achieve the necessary stability and strength that
enables them to deal with other issues they face.
The tribes who achieve true sovereignty and prosperity will
be those who focus on the importance of the family, caring for
their neighbors, remaining to the true core values that make up
every Native American community.
Today's conversation with these five witnesses will help
shine a light on how Oklahoma tribes and individual business
owners have achieved economic success. We'll get into the
barriers that have been overcome and still must be overcome in
the days ahead to achieve sustainable economic stability. We'll
also hear how banks can help tribes and Native American
businesses leverage money to build in the development they've
already achieved. From an educator, we'll hear how schools can
help ensure the next generation of Native Americans are ready
to continue the work done by today's leaders.
From the SBA, we'll hear how Federal programs can be used
as a starting point for economic growth and so many other
areas. I'm very pleased to be able to have this conversation.
Now, this is a unique hearing. If any of you have been to
an economic development hearing or, specifically, a hearing in
Washington, D.C.--what's interesting about a hearing like this
is everything goes on the congressional record. I have a
wonderful person sitting right behind me that types in every
word that we say to put it on the actual record, as well as
there's a recording of this. This is very similar to any
hearing that we would have in Washington, D.C. The difference
is individuals are able to engage here in Oklahoma. So all of
this will go into the official congressional record for the
United States Senate--all of the testimony. So no pressure, but
everything you say is being recorded and going into the
official record.
It's also extremely important that we receive testimony
from different tribes. The individuals that are on the dais
here today represent individuals or businesses or the SBA, to
be able to talk about economic development in Indian Country.
But we've also asked Tribal Leaders to send in documents to
represent individual tribes with different ideas. If you would
also like to contribute something to the official record and
you have something to submit around this topic, feel free to
also submit that and you can send that to my office in the next
two weeks and we'll hold the record open for the next two
weeks, to be able to submit those to get in on the record. So
that makes this a unique conversation as we walk through this.
The format of this is I'll introduce our five witnesses.
Each of them will have about five minutes to be able to
actually contribute orally. They've already submitted also a
written statement to go in the permanent record and then I'm
going to field questions back and forth with you as well, and
that will be part of the record as well.
So, let me introduce our witnesses. It is a custom of our
committee to swear them in, I'll do that at the end of all our
introductions.
Sean Kouplen is the President and CEO of Oklahoma based
Region Bank. He's led a group of investors in purchasing the
bank in 2008, and under his leadership the bank has tripled in
size. He's been long active with program support in community
and economic development. He's also Chairman of the Board for
OneFire Holdings, the business arm in the Muscogee Creek
Nation. A graduate of Oklahoma State University. He's been
married to his wife, Angela, for 15 years and has three
children. Thanks for being here, Sean.
Mr. Kouplen. Thank you.
Senator Lankford. Frank Narcomey is the founder and
President of Southwind Construction Services LLC, a small,
general construction firm, specializing in private sector and
government design-build type projects. Frank is an Oklahoma
native, half Seminole/Creek and a member of the Seminole Nation
of Oklahoma, a graduate of Oklahoma State University. He
founded Southwind in 1991 and has been very active in his
community. Southwind is a graduate of the SBA's AA Program and
since graduation has assisted other companies as they were to
successfully complete the program. He's been married to his
wife, Cindy for many years and has two grown children.
Dottie Overal is the U.S. Small Business Administration
Oklahoma District Director; a Native of Philadelphia. She has
served in management positions in the SBA throughout the
country. She was appointed as a district director for Oklahoma
in 2000, in this capacity, she and her staff of 12 provide
access to capital, counseling, contracts--or assistance after
natural disaster to the 77 counties in Oklahoma. Her office
also administers the SBA's 8(a) Business Development Program in
Oklahoma.
Dennis Ruttman began his career as a business owner with
his father in Woodward, Oklahoma and operated it for nearly 20
years. He joined the Oklahoma Department of Career Tech in 1989
as the Skill Center Instructor and later became an
administrator. In 2004, he became Business and Industry
Services Director at Pioneer Technology Center in Ponca City
and was heavily involved in the business recruitment and
retention efforts of the Ponca City Development Authority. He
returned to the Oklahoma Department of Career Tech as the
Associate State Director in 2008 before accepting his current
position as the Superintendent/CEO of Caddo Kiowa Technology
Center. Thanks for being here.
Lieutenant Colonel Clark Southard is the Executive Director
of the Wichita Valley Regional Partnership, a regional economic
development consortium based out of Fort Cobb, Oklahoma. He
also serves as Chairman of the Oklahoma Southwest Alliance, a
20-county economic development organization in Southwest
Oklahoma and Vice-Chairman of the Delaware Nation Economic
Development Authority. He served in the United States Army for
29 years before retiring in 2003.
Thanks for your service in that.
He returned to his native Oklahoma in 2008 to assist with
economic development activities in Southwest Oklahoma, where he
now resides.
I want to also recognize Pamela, who is not here with us.
We had one other witness that was planning to join us today.
Pamela could not be here because she is actually taking cancer
treatments--actually today and was not going to be able to join
us, but that she had been invited originally for that. And if
you all don't mind, she's in the thick of treatments--if you
all don't mind, I'd like to pray for her for just a moment and
then we'll swear our witnesses in.
Father, thanks for allowing us to have this conversation. I
do pray for Pamela, as she deals with very difficult days. I
know she would much rather be here. I pray you sustain her and
her family and carry her through the very difficult treatments
ahead. Give her strength and health in her body in the days
ahead. Help us in this conversation today, in your name I pray,
Amen.
[Response.]
Senator Lankford. It is the custom of the senate committees
to swear in witnesses before we begin testimony, so if you
would all please rise.
[Witnesses rise.]
Senator Lankford. Raise your right hand. Do you solemnly
swear or affirm the testimony that you're about to give before
this committee will be the truth, the whole truth, and nothing
but the truth, so help you God?
All Witnesses. I do.
Senator Lankford. Let the record reflect that all the
witnesses answered in the affirmative. You may be seated.
Mr. Kouplen, no pressure, but you are first up, and we'll
be glad to be able to receive your testimony right now.
STATEMENT OF SEAN KOUPLEN, CHAIRMAN/CEO, REGENT BANK; CHAIRMAN
OF THE BOARD, ONEFIRE HOLDING
COMPANY
Mr. Kouplen. Thank you. Thank you, Mr. Senator, and the
fact that we are witnesses--we just were sworn in and every
word we're saying is on the record makes me a little nervous, I
don't mind telling you.
It's very good to be with all of you. As the Senator
mentioned, my name is Sean Kouplen. I am a banker by trade, I
also invest in a number of small businesses and am a member of
the Creek Nation, serving as Chairman of the their Onefire
Holding Company.
This is a topic that is very dear--near and dear to my
heart, both, because of where I live, because of my family, and
because of the industry that I serve in. And so, my comments,
which I will just summarize for the audience and for the record
really deal with kind of a number of areas where I believe we
could do better, as it pertains to economic development in
Indian Country.
First and foremost, when you think about the keys to
investment and the keys to attracting investment and being able
to open up and grow businesses, you really have to think about
what we call in banking, are the five C's of credit. You look
at the individual's cash flow or their history of being able to
produce cash flow. You look at the individual's credit, their
past ability to meet their obligations, their character or
their reputation within the community, their capacity, their
ability to recover. Small business is, as Dottie knows, is very
difficult and you go through many ups and downs. And, you know,
the ability to kind of recover from those either via liquidity
or net worth.
And then, finally, collateral, in the event that the bank
has made the loan and things don't work out. We can't afford to
make very many bad loans or we're--we go under. So, when you
think from an investor perspective, it's very similar, you're
looking for the lowest risk, highest return investment that you
can find.
So as it relates to how do we achieve those things in
Indian Country and for our Native American population. So my
thoughts would be--first and foremost is, I have studied to
prepare for this. There are many great programs available. I
think first and foremost is training and outreach. I know in my
industry, in banking, I think there are a number of programs
that I have learned about in the last 48 hours that I didn't
know existed. And I think much of that is because both our SBA
and Bureau of Indian Affairs--BIA offices are scantily funded,
if you will. They just don't have the people necessary to get
out in the communities and provide training and outreach to
those of us that are in the communities.
I thought about ways to enhance economic investment for
Native Americans. First of all, I would expand government
guaranteed programs. For those that are not familiar, when a
bank makes a loan, many times there is a weakness within the
loan that is difficult to mitigate. Maybe they don't have
enough collateral or they don't have the equity--the down
payment needed or they don't have quite as much experience as
you would like to see, but you want to make that loan. One of
the ways we were able to make it is primarily through
government guaranteed programs, through the Small Business
Administration or Bureau of Indian Affairs. Well, just take the
BIA--Dottie will talk about the SBA--but just take the BIA for
example, they have about $100,000,000 available to them in
guarantees. That is--that's basically been used up this year.
There are projects waiting to be funded that are not going to
get funded because there's not enough allocated to them. And,
you know, they're in essence, kind of a one-man show or one-
woman show here in Oklahoma. So, first and foremost, would be
expanding. I would recommend expanding that--the allocation to
the BIA.
Second of all, further development of Buy Indian programs.
I think that we've done a great job through Artero (phonetic)
programs within the tribes, of expanding Indian employment. I
don't think we have done as good a job of promoting that our
government contractors and other organizations buy Indian--that
they buy products from Indian-owned companies.
And finally, I would really look at--from a guarantee
perspective, I would look at the model that the Section 184
Housing Program has proven. We have done 11,336 Section 184
home loans in Oklahoma, to date. This was shocking to me.
That's as much as the entire country all put together. That's a
100 percent guaranteed program that allows individuals--Native
Americans, that otherwise probably couldn't get approved for a
home, to get a bank loan. I think it's a fantastic model for
what we could do for Native American businesses if we were
really committed to doing that.
Next, how do we enhance the flow of capital into Indian
Country. I believe the EB-5 Program--this is a foreign
investment program, I can expand more on later if you wish--
should be made permanent. I believe we are creating a regional
center through Onefire and the Creek Nation and our goal is to
bring foreign investment into the Creek Nation's borders, but
this program is always a little concerning. Is it going to be
continued? Is it going to, you know--is political pressure
going to make it go away? I think it needs to be made much more
permanent.
I think tax incentives are critical. You know, the
accelerated depreciation in Tulsa, it is absolutely critical.
It lowers the tax burden on our business owners.
New market tax credits to encourage people to invest in
poor areas of the state, I think are absolutely critical.
And then, finally, how do we get more Native Americans
employed in great jobs? And so I would offer--definitely need
to renew the Indian Employment Tax Credit. I would say that
$20,000 doesn't buy you a whole lot these days, as wages have
gone up. I would propose that the amount for that tax credit
should go up from $20,000, to $30,000 or $40,000. And then I'm
very intrigued, I just learned about this Tribal Labor
Sovereignty Act of 2015, where when you look at state and
Federal governments, they determine their own labor standards,
but tribes do not. Well, they're sovereign governments as well
and should be treated, in my opinion, the same way as our
Federal and state governments. So, those would be my thoughts,
Mr. Senator.
The prepared statement of Mr. Kouplen follows:]
Prepared Statement of Sean Kouplen, Chairman/Ceo, Regent Bank; Chairman
of the Board, Onefire Holding Company
Keys to Economic Advancement for Native Americans
1. Keys to investing:
a. 5 C's of credit: cashflow, credit, character, capacity,
collateral
b. Low risk, high return
2. More training and outreach of existing programs
3. Ways to enhance economic investment for Native Americans
a. Lower investment risk through government guarantee programs
like BIA
i. Slow, minimal resources
ii. Section 184 program for homes- 11,336 loans to date!
b. More resources for BIA
i. Higher guarantee percentage
ii. Clearer ground rules
iii. Lower equity requirement
iv. Grant program for new businesses?
c. Further development of Buy Indian programs
i. Disadvantaged business rules with government contractors
4. Increase the flow of capital into Indian Country
a. Make EB-5 permanent--great source of foreign investment
b. Tax incentives for investing in Indian Country--very poor
areas of the Creek Nation need investment badly
c. Accelerated depreciation--continue; saves millions of
dollars
d. New market tax credits--The NMTC Program provides tax
credit incentives to investors for equity investments in
certified Community Development Entities, which invest in low-
income communities. The credit equals 39 percent of the
investment paid out (5 percent in each of the first three
years, then 6 percent in the final four years, for a total of
39 percent) over seven years (more accurately, six years and
one day of the seventh year)
e. Expand Buy Indian Act by adding transparency and
accountability, and expand it to all Federal programs that work
with Indian communities
5. Ways to improve Native American employment
a. Renew the Indian employment tax credit
i. $20,000 is too low--increase it to $30-40,000
b. Tribal labor sovereignty act of 2015--treat tribes as a
sovereign government and let them set their own labor standards
Senator Lankford. That's good. Thanks, Mr. Kouplen.
Mr. Narcomey.
STATEMENT OF FRANK NARCOMEY, PRESIDENT, SOUTHWIND CONSTRUCTION
SERVICES, LLC
Mr. Narcomey. Thank you, Senator.
My name is Frank Narcomey, I own Southwind Construction
Services LLC, Edmond. And what I'd like to share today is--you
know, as far as success, that's a little bit hard for me to,
you know, tell you that, you know, I'm successful. And because
there's been too many people--too many things in my life, that
if it wasn't for the SBA, if it wasn't for a mentor, if it
wasn't for someone, you know, giving me the courage to start a
business, you know, I wouldn't be here. So I'm really
appreciative that I had the opportunity and--you know, a lot of
people struggle. A lot of individuals struggle. A lot of Native
Americans, you know, I see them struggle and, you know, how do
you start?
And my story is basically one that to me is almost a
miracle that--I was listening, Sean, to you and I sat on the
front porch, I had two young boys in diapers and I wanted to
start a business. I was working for a good company but I was
just at a dead-end spot. I was making, you know, $30,000 in
1983/1984, and my wife was working and, you know, I was 58
years old at this time and I made out this long drawn out plan
of where I might be financially or where we would be
financially at this time. And, you know, I had everything
budgeted and it was really tough. It was tough. Our vehicles
were going to have to last about 18 years, you know, and
fortunately, that didn't have to happen.
But, what I did was--I had a friend and he knew that I had
some management ability, but I had no capital. Cindy and I took
$500 out of our checking account. We opened up a Post Office
Box and I got a computer, and I bunked the two boys together in
one bedroom and I took one bedroom and opened up a telephone
line and just moonlighted. And I had been around the Oklahoma
City area for, at that time, for about nine years, so I had
made a lot of good contacts with subcontractors, suppliers,
other GC's, et cetera. And this friend of mine in the insurance
business, he knew I didn't have any money but he told me, just
go out and get as many references that you can.
So that's what I did, and in the process of asking people
and letting people know that, hey, I'm going to start a
business, somebody told me about somebody and then that person
got me hooked up with another person. And next thing you know,
I'm studying the SBA rules, and back in the old days, it was
the SDB Set-Aside--Small Disadvantage Business Set-Aside, where
you actually self certify, so you're not 8(a) certified, you're
self certified. And we went after some contracts on some
military bases and this joint venture that we put together that
chased some of these SDB Set-Asides--I found someone that, you
know, believed in me enough, that I knew long enough, that he
provided the capital. I found another contractor that had the
technical ability to write proposals, and then, basically, I
was the management person on the ground.
And I had never, ever, seen a military base in my life and
we bid a contract. I started Southwind in October of 1991. In
August of 1992, that's when we got our first contract and we
put together this proposal for a construction contract in
Davis-Monthan Air Force Base, Tucson, Arizona. And I had never
seen an Air Force base--I mean, I still to this day, am not
sure exactly what all the stripes mean, but it's just ``yes,
sir''. And we got that contract and this contract--I got a call
from the contracting officer at my house, Mr. Narcomey, we have
selected you; however, you have been protested and I need you
to get through this protest. But, you know, I was still working
for a company and I had to spend time defending this protest
and the money man behind me said, hey, I'll just front you some
living expenses, but you got to win this protest. And this was
probably the only protest I've been through without an
attorney, but I did it all by myself and got this.
And it was a $20,000,000 contract at Davis-Monthan Air
Force Base and it was unbelievable. And I was scared to death
and this contracting officer, Imogene Britz--I basically told
her who I was, and I told her, Imogene, I belong here. And I
may not know exactly what I'm doing but if you'll help me, I'll
be the best contractor you've ever had. And a couple of years
later, she nominated us for small business contractor of--you
know, small business contractor of the year, nationwide. We
didn't get it. But she and I and Cindy had an opportunity to go
to Washington, D.C., but she told me she had never nominated
somebody before.
But I think the success that I've had is just--I've had to
go to Dottie. I've known Dottie for a long time. I've had to go
to her people and I've had to, you know, ask for help. I've had
to--if it wasn't for my government counterparts--contracting
officers and tell them, you know, I'm afraid, I'm scared, I'm--
hey, I've got an issue that I need help on. There has just
been--everybody has been willing to help me and I think there's
so many folks like that on the government side that--
individuals like me that are afraid to start, it can happen,
you know. It can happen.
And when we graduated from the 8(a) Program in 2007, again,
I'm scared. You know, what are we going to do? I've put a lot
of the eggs in that basket.
Well, fortunately, there has been small business set-asides
that are small business. They may not necessarily be 8(a), but
they're for small business entities. So we have been able to
stay afloat, if you will, in the small business sector and
we've grown enough that we've done some good projects for
larger private companies like Halliburton. But, I'm
conservative and so I try to stay, you know, within a realm of
what we can definitely take care of and manage well.
My mentors have always told me, you can have too much, and
that would be worst than not having enough.
So, at the moment we're struggling--the crystal ball is, I
can't get the government off high center on some--you know,
getting through some designs or there's some issues, but I know
it'll come. And I'm just glad to participate and that's why I
feel my destiny is to give back to someone that I met that I
can probably help and guide, direct, mentor, and give them a
start. Thank you.
The prepared statement of Mr. Narcomey follows:]
Prepared Statement of Frank Narcomey, President, Southwind Construction
Services, LLC
Southwind Construction Company, Inc.--an SBA Section 8(a) Success Story
This is the story of how the Small Business Administration and the
8(a) program changed my life and allowed me to change the lives of
others.
Early Years
My father, ``Redman'', was full blood and a Golden Gloves boxer. My
white mother was the daughter of a strict Methodist preacher. Born
premature at Pawnee Indian Hospital, I began life in 1957 as the first
born of two 19 year old ``kids'' from completely different backgrounds.
One perhaps, soothing the effects of the ``Trail of Tears'' with
alcohol and the other, preaching the ``word'' while quietly condemning
the marriage to an ``Indian''. Alcohol and its complete obliteration of
anything worthwhile eventually ended the marriage. When I was 13 years
old, my father pronounced me ``man of the house'' and gave me the
authority and responsibility of taking care of my mother and two
younger brothers. This would later cause me enormous emotional
problems.
Hard Times
We never had any money to start with and that certainly was the
case after the divorce. As the oldest of three boys (``and man of the
house''), I helped my mother make ends meet by doing odd jobs after
school and on weekends. I felt shame in having to survive on food
stamps and hide from my friends that I was the janitor at the local
theater hangout. Although I was unaware of it at the time, being both
an adolescent and surrogate ``man of the house'' created emotional
conflict. Anger, knocking holes in walls, and fighting became my
primary means of dealing with these emotions and in particular, when it
came to my mother and brothers. Fortunately, sports and compassionate
coaches helped motivate me from straying too far off course. I
graduated from Edmond Memorial High School in 1975.
Hope For A Better Life
My hope was that a college education would provide me the means of
getting out of poverty. The downside: no money, no car. The upside: I
could qualify for a low income BEOG grant, BIA grant, and low interest
student loan; I could work part-time and of course ``bum'' a ride for a
while. Since I had become quite ``technically'' proficient in repairing
holes in drywall, it's not surprising that I chose to pursue a degree
in Construction Management. With the ``Seminole'' will to survive, I
never lost sight of my hope and eventually graduated from Oklahoma
State University in 1980 with a Bachelor of Science in Engineering
Technology, Construction Management degree.
Starting A Career
Upon graduation I began work with a large construction firm, J.W.
Bateson Company in Dallas, Texas. I worked in the Dallas estimating
department for about a year and a half and was subsequently assigned to
the OKC VA Hospital project, a $33 million three year project in
Oklahoma City. After completion of the VA project, I decided to stay in
Oklahoma and found work with a small construction firm, Timberlake
Construction Company, in Oklahoma City, Oklahoma.
Alcoholism
Obvious (to others anyway) signs of a drinking problem were meshed
throughout my college days and early working career. Blackouts were
common. I thought firsthand knowledge of seeing Redman drink himself to
death would surely be enough to save me from this insidious disease. I
was wrong. Without my knowledge or consent, somewhere along the way I
had succumbed to alcoholism . . . terror, bewilderment, frustration,
despair. With the help of a mentor and the Power of a ``Spirit of the
Universe'', my journey of sobriety and the unravelling of deep
emotional wounds began in August of 1987. Sobriety brought healing and
courage. With courage, the faint idea of starting a business would
eventually became a reality.
Southwind Construction Company, Inc.
As its sole owner and shareholder, I incorporated Southwind in
October of 1991. Still employed with Timberlake, I made a bedroom of
our small house into an office and worked late nights, early mornings,
and weekends reading the SBA's regulations concerning SDB (Small and
Disadvantaged Business) programs, making contacts, etc. ``Good ideas''
can only go so far. Without capital or experience, most of my efforts
were dead ends. Eventually however, I did find the right people willing
to help and, with the help of the SBA, formulated a Joint Venture to
provide the capital, bonding and experience necessary to complement my
management abilities. The Joint Venture successfully completed several
multi-year IDIQ JOC and SABER type contracts, which provided Southwind
the foundation it needed to take the next step--the SBA's Section 8(a)
program.
The 8(A) Program
I believe Southwind to be the perfect candidate for which the 8(a)
program was designed. Definitely a ``disadvantaged individual'' (half-
breed, alcoholic) with a potential for success . . . but lacking the
resources and contracts necessary to foster growth. Southwind entered
the program in May 1997 and graduated in May 2006. During this time
period, Southwind's annual revenues increased from an average of $2.5
million a year to a sustained average of $25 million a year. Our
employee numbers went from five to thirty five. The 8(a) program
fostered not only business growth but my own personal growth as well. I
learned from my SBA and Government counterparts that success isn't
necessarily measured by revenues; but rather accountability, honesty,
integrity, mutual respect and performance of the work. I'm forever
grateful to have participated in SBA's 8(a) Business Development
Program. It allowed me opportunities I never dreamed possible.
Southwind Construction Services, LLC.
Prior to graduating the 8(a) program, my SBA and Government
counterparts, as well as fellow business associates, encouraged me to
create a ``continuation'' plan. Obviously, without the 8(a) program, we
would now be in a competitive market environment on a full-time basis.
And from a personal standpoint, 15 years as the sole owner and decision
maker was starting to wear on me. These and other factors led to the
creation of Southwind Construction Services, LLC in May of 2007. As
Managing Member and majority owner of Southwind Construction Services
LLC, I was able to: utilize past performance experience; reward two key
employees an ownership stake for their dedication and loyalty; and
provide better management oversight and decisionmaking. Last but not
least, it has allowed me the opportunity to give back to the 8(a)
program by working with struggling or up and coming 8(a) firms that
might need a helping hand. To date, Southwind Construction Services
maintains annual revenues of $25 million, employs thirty five people,
and has helped a number of both individual and tribally owned 8(a)
companies develop their businesses.
Senator Lankford. Okay. Thanks, Mr. Narcomey.
Mr. Ruttman.
STATEMENT OF DENNIS RUTTMAN, CEO/SUPERINTENDENT, CADDO KIOWA
TECHNOLOGY CENTER
Mr. Ruttman. Thank you, Senator. Glad to be here today.
In a sense, I represent 29 technology centers here in
Oklahoma, because what we do, we do statewide. Our district
represents 1,954 square miles of Southwest Oklahoma. It was
founded in 1968 and the goal then was the same goal we have
now, to help our students in our area of the state prosper.
About three years ago, my Board one night gave us
permission to start an economic development regional
partnership and Mr. Southard will certainly address that a lot
more for us. At the time, the question was why are we doing
that?
Well, first off, we have partners and Clark will talk about
those as well. But the fact is you kind of have to take charge
of your own destiny once in a while and I have a totally self-
serving motivation. If we grow our economy in Southwest
Oklahoma that means my school's budget grows. Well, we like
that. It helps us do more things and provide more services. The
fact of the matter is our economy is doing better all the time.
We're very pleased with a lot of things that go on, but we have
to have good quality jobs.
And along time ago, companies used to decide where they
were going to build a facility at and people would move to go
to that facility. Workforce has become such a huge issue for
companies now, that they move where the workforce is. We feel
like Caddo County, in this region, we have some really, really
good students that our ascending schools have trained and send
us. They send us very educated kids. And companies look at
that, what do you have for a workforce? What's actually
available?
If you live in Western Oklahoma, at least until the last
six months, workforce is a pretty big deal. They had trouble
hiring people and the money just kept going up. So, we continue
to look at ways to create more jobs.
I'm going to real quickly run through some of the services
we provide. And I know this is in the record but I think it's
important to understand that along with economic development,
we have a business development center. Shaun Frye (phonetic) is
here, she heads that up for us. And we help people do a lot of
things. There's an incubator in there. We actually have three
tribal-owned businesses in there right now. We also house the
regional economic development partnership in there as well.
Business incubator sounds like a pretty silly way of--my
grandkids have asked me, well, what are they hatching there?
Well, we're hatching businesses. Folks have a dream, they have
an idea. They sometimes don't have a lot of capital. They don't
have a lot of expertise. We help them grow that business. We
have a person that helps them write their business plans. We
help them with marketing. We help them with their bookkeeping,
everything they need to grow that company. And are all of them
successful? No. Nationally, you guys know the rate is horrible
for first, second, or third year business failures. Ours do a
little better than that, so we're pretty proud of that.
We do everything from customize training. In fact, Unami,
one of those companies, when they got ready to start up, they
had to have not only safety training but training in how to
operate very specific equipment for the product they make. We
geared up and did that in a very short time. We helped them
with a job fair. Our staff have done a lot of things.
And I guess the other thing I would say is we prepare
students to--not only that are college bound through our pre-
engineering and bio-med programs--in fact, we have a proud
grandfather sitting back there of one of our pre-engineering
students. They do great, but we also prepare them for the
workforce. That means job interviews, resume writing, soft
skills about workplace etiquette, all those things that they
really need to be successful. Along with that, we add about 400
CDL drivers--truck drivers to the workforce every year down
here, at an average of $35,000 to $70,000 a piece, you can do
the math, for about a three week investment of time, we're
adding a lot of people.
So, I'll kind of finish off by saying this, we have, gosh,
about 86 percent of the students that start with us, complete.
They graduate. And 89 percent of those move straight into jobs
that we've helped them get or we've trained them to get. The
only disconnect I see is that sometimes we send them out of
there with a good job and a lot of things to do, but, frankly,
sometimes they don't have the support on the other end--when
they get home, when they go back to the community--to stay
engaged. And we get--we help them get that job and they are
gung-ho, but the week spot is sometimes we kind of let them
fall off the face of the earth after they go out the door. I
guess that's where I'd say I would love to see a way to have
some more interaction between tribes and us. And we do have a
lot of interaction with tribes right now, but maybe a way to
develop that support network further. So, I'll quit there.
The prepared statement of Mr. Ruttman follows:]
Prepared Statement of Dennis Ruttman, CEO/Superintendent, Caddo Kiowa
Technology Center
Honorable Senator Lankford,
I am honored to have the opportunity to address the United States
Senate Indian Affairs Committee in this field hearing session today. I
am a native Oklahoman and have lived here nearly my entire life.
Experience and Credentials
I currently serve as Superintendent/CEO of Caddo Kiowa Technology
Center (CKTC) in Fort Cobb, Oklahoma. CKTC was the second of 29
Vocational schools created in Oklahoma. Our district encompasses 1954
square miles here in Southwest Oklahoma and we partner with 13 sending
schools within our district one of those being Riverside Indian School
in Anadarko. We also work directly with 13 tribes in our area. I serve
on the Washita Valley Regional Partnership board and am a past trustee
of the Ponca City Development Authority board. I have led several
groups over the course of my career and am a graduate of the University
of Oklahoma Economic Development Institute.
Education and Workforce Development Observations
CKTC and our partner schools all strive to help our students find a
path to a better life. Many of our students have difficult situations
they must work around in order to find that path. Three years ago our
board made the decision to help us start a regional Economic
Development Partnership which Mr. Southard will address. The rationale
for that was to try and create quality jobs for the great, skilled
students we help produce. We are well on our way to helping that dream
become reality.
At CKTC our fulltime students have training opportunities in the
following areas:
Construction Technology
Heating, Ventilation and Air Conditioning
Digital Imaging and Printing Technology
Business Management and Administration
Business Financial Management
Health Careers
Licensed Practical Nursing (Adult Students Only)
Occupational Therapy Assistant (Adult Students Only)
Physical Therapist Assistant (Adult Students Only)
Culinary Arts
Early Care and Education
Cosmetology
Web and Digital Communications
Welding
Pre-Engineering (High School Students Only)
Biomedical Sciences (High School Students Only)
Collision Repair
Automotive Service Technology
Diesel Service Technology
Our Business and Industry Services division provides a number of
services to our taxpayers as well.
Volunteer Firefighter Training--Volunteer Firefighter Training has
been available at no cost because of a grant made available thru the
Oklahoma Legislature. CKTC has 14 Volunteer Fire Departments within its
district.
Healthcare Training--The health care industry is in desperate need
of a qualified workforce with specifically aimed skills at enhancing
and increasing the retention for workers in nursing homes and skilled
nursing facilities. In the area of CNA, CMA, LPN and Home Health. CKTC
has trained professionals in these areas with short term training and
full time training.
Short Term Adult and Career Development Training--CKTC brings
professional instructors and speakers to their businesses as well as
sending employees to the campus. Some of the topic areas include
specific items such as time management, professional etiquette training
to specific industry training. Cooking classes have been customized for
students of the Riverside Indian School, Computer training, basic
website classes and photography are available and again, this type of
training is not limited to the borders of the campus but can be taught
in the district.
Safety Training--is requested by many Business and Industry clients
to stay OSHA compliant. Safety topic training areas include but not
limited to consist of basic safety, fork lift safety and operation,
Fire safety, lock out tag out, OSHA training and CPR. Many of our
tribes utilize this service because of the child care facilities they
run.
Business and Entrepreneurial Services and Caddo Kiowa Business
Development Center--BES offers confidential counseling and one on one
assistance to businesses within the district. The assistance consists
but is not limited to helping with business plan development, funding
sources, income tax, marketing, cash flow analysis and business sales
projections.
Oklahoma Bid Assistance Network (OBAN)--provides marketing and
technical assistance to Oklahoma businesses interested in selling
products and services to federal, state, local and tribal governments.
CKTC is privileged to house on campus one OBAN coordinator which has
helped numerous businesses and Native American Tribes within the
district with government contracts. Specific tribes include the
Delaware Nation and the Wichita Tribe of Oklahoma.
Truck Driver Training--Truck Driver Training is offered on the
campus of CKTC. This short term program area is designed to train
individuals to become professional truck drivers. Within this program
area is the bus driver training program that has been beneficial to
many of our partner schools including Riverside Indian School located
in Anadarko Oklahoma.
Business Incubator--Caddo Kiowa Business Development Center (CKBDC)
is the perfect opportunity for small multi use companies. The CKBDC
Business Incubator gives entrepreneurs and start up business owners the
skills and guidance they need to succeed. Some of the benefits to being
a tenant in the business incubator include graduated rent, one on one
coaching, access to funding sources and business and technical support
services from the entire BIS staff. Currently the CKBDC Business
Incubator houses four businesses or entities. The Delaware Nation
Economic Development Authority, Unami Lighting Company, Create IT, and
Washita Valley Regional Partnership. Three of the four business are
Native American owned and operated.
Customized training--When a company is need of upgrading its
workforce Caddo Kiowa Technology Center is where they turn. The
technology center is capable of providing training with a short
turnaround time. Many industries require specialized training that is
specific to their industry and career tech is able to provide it.
Flexibility is the key to meeting the needs of the client. Caddo Kiowa
Technology Center has employees on staff that can do safety analysis of
a business and recommend a solution to safety problems with specialized
training. CKTC also offers pre-employment training for existing
companies or companies moving into the area.
Job Fairs--CKTC provides job fair services to expanding and new
companies needing to fill the workforce requirement. CKTC helps
potential employees with resume' development, interview skills and
general employability skills.
Ag Business Management--We provide expertise in best farming
practices as well as the financial side of the agriculture industry.
As you can see we try to help people and companies to be successful
in Southwest Oklahoma.
Observations and Recommendations
We are extremely proud of our students. That said, sometimes when
students complete their studies here at CKTC they return to the same
environment they left. 86 percent of our students complete their
training at CKTC and 89 percent of those get jobs in the area they
trained for. I believe that with stronger support after they leave us
we can continue to help reverse the trend of not feeling the need to
work. One recommendation would be to establish Placement/Job Retention
Coordinators at the tribal level. People which could work directly with
us, our students and businesses, perhaps even office at our facility to
work with our tribal students and businesses in the area. It's a small
step which could have a big impact. The other recommendation I would
have is to work to get more push from the tribal side to encourage
their members to get an education and a job so they can continue to
build on the image of being a highly sought after workforce.
The definition of insanity is doing the same thing and expecting
different results. We are changing the way we do things here at CKTC.
Education is alive and well here in Southwest Oklahoma. I believe we
are headed in the right direction and am excited to see what the future
brings.
Attachment
Workforce and Education Information
Caddo County Demographics:
District Population 34,214 according to 2010 Census
Caddo County ranks among the poorest counties in Oklahoma
(Kids Count Fact Book)
--21 percent Poverty Rate (Office of Educational &
Accountability Profiles 2013)
--Average Household Income $48,346
Caddo County unemployment rate is 9.9 percent of reported
unemployment (Office of Educational & Accountability Profiles
2013)
32.4 percent Single parent families (Office of Educational &
Accountability Profiles 2013)
13.5 percent College Graduates in county (Office of
Educational & Accountability Profiles 2013)
72 percent Free or Reduced Lunch (Office of Educational &
Accountability Profiles 2013)
High School Graduates going to college 40.1 percent (Office
of Educational & Accountability Profiles 2013)
Public College Remediation Rate for Caddo County 43.5
percent (Office of Educational & Accountability Profiles 2013)
High School Participation Rate in Career Tech Program (Tech
Center & High School) 51.6 percent (Office of Educational &
Accountability Profiles 2013)
Caddo County dropout rate 15%
Caddo County End of Instruction (EOI) Performance 65%
83 percent of full-time students received grant or
scholarship from the federal or state government
--Average amount of grant or scholarship aid from federal or
state government was $2,903
Caddo Kiowa Technology Center District Demographics
--Caucasian 38%
--African American 4%
--American Indian 34%
--Two or more races 22%
--Female Students 57%
--Economically Disadvantaged Full Time Secondary Students 26.6%
Caddo Kiowa Technology Center Success Measures (Oklahoma
Department of Career Tech Follow Up Data)
--Retention & Completion 86%
--Related Placement 89%
--Career Readiness Certifications 97%
--National & State Certification/Licensure 36%
Tribal Involvement:
CKTC served 13 different tribes in 2014/2015 school year
CKTC involves local tribes in Business Education Councils &
in Job Interview Events on campus
Bureau of Indian Affairs
--Resource for Tuition & Books to CKTC for Tribal Members
--Educational Stipend to Tribal Members for attending school
Bureau of Indian Education
--Pay for Books & Tuition or any balances not paid by other
assistance
Early Care & Education
--Agreement with CKTC Early Care program to provide Head Start
Services to 3 & 4 year old children enrolled in the program
*The Kiowa Tribe pays for one full time employee with
benefits
--Tribal Block grant to pay for child care attendance charges
Senator Lankford. Okay. Thank you.
Ms. Overal.
STATEMENT OF DOTTIE OVERAL, DISTRICT DIRECTOR,
OKLAHOMA DISTRICT OFFICE, U.S. SMALL BUSINESS
ADMINISTRATION
Ms. Overal. Thank you. Good afternoon, Senator. Thank you
for this opportunity and I bring you greetings from our
administrator, Maria Contreras-Sweet and she sends her regards.
SBA's mission is to strengthen the nation's economy by
establishing the vitality of small businesses in our country.
Underpinning all of our efforts is the notion of
``inclusive entrepreneurship''. That means making our programs
available to all people, regardless of age, race, gender, or
geographic location.
My testimony today will focus on the work, in the Oklahoma
Native American community through our--with our 7(a) Lending
Program, our 8(a) Business Development Program, and the HubZone
Program.
The 7(a) Lending Program is the SBA's primary lending
program. And as Sean so very eloquently expressed, these loans
do not come directly from the SBA. They're made by a local
lender and the SBA guarantees them. This allows the bank to
take a greater risk and in most cases, provide a longer payback
period for the small business owner. Over the past five years,
SBA guaranteed over $68.8 million in loans to Oklahoma Native
Americans, like Sherrie Schatz of Schatz Publishing in
Blackwell, Oklahoma; and Carolyn Bahner, owner of Expanded
Solutions in Oklahoma City.
The 8(a) Business Development Program is a nine-year
program, established to assist eligible socially and
economically disadvantaged individuals to develop and grow
their businesses. Like Frank shared with you today; and like Al
Alfaro, of He and I Construction in Lawton, Oklahoma; these
firms were able to access government contracts. Currently, the
SBA Oklahoma portfolio of 8(a) firms, there are 75 of them; 35
are tribally-owned firms and 25 are Native American-owned
firms. So, a good portion of our portfolio goes to the Native
community.
On another note, two-thirds of our state is now a
designated HubZone. When I first arrived in Oklahoma, SBA did
not recognize Indian lands as being eligible for the HubZone
Program. So we fought very hard to get that designation and I'm
happy to say it's been very successful. Right now, I'm working
with the Oklahoma Bid Assistance Centers and the SBA Office of
HubZones to create a pilot program where we'll be able to
provide hands-on training to individuals who want to get into
the HubZone Program. Because sometimes the online application
is daunting to people. So this is an effort we're working on
and hopefully we're going to roll that out, probably by August
the 1st this year. We're very excited about that.
As you're aware, the Choctaw Nation received a Promise Zone
designation for the 11 counties in Southeastern Oklahoma. And
right now, we have two major events for the Promise Zone. One
will be a Native focused 8(a) application training in
McAlester, and the second will be a lender matchmaking event in
Durant, where we bring lenders to the businesses. So an
individual can sign up to participate in this event and meet
five or six lenders in one morning and give a small pitch to
them and then hopefully, one of the lenders will be interested
in making them a loan. We'll also have individuals there who
can provide some guidance, either before the event or after, to
help them with that business plan.
Our Office of Native American Affairs is led by Chris James
and he's been in that position since 2011. And for most of the
people in the audience, Chris is no stranger to Oklahoma. He's
been here many times. And one of the things we have coming up,
in which Oklahoma will be a part of, is something called hack-
a-thon. And it's a program to teach tribal youth how to
employee the kinds of business problem-solving skills that are
used in places like the Silicon Valley. We're very excited
about that coming to Oklahoma.
Another area that I'd like to share with you is our LINC
Program, which stands for Linking Information and Networks to
Access Capital. In this program, an individual can go into the
Internet and post some information about what they're looking
for. And all of the lenders who are signed up for this program
will receive this information and they can contact the
individual, but we piloted that program in the American Indian
and Native American entrepreneurial groups. So that was the
test market for this program. We thought it would be very
successful and we just unrolled that. And I don't know, Sean,
if you're participating in that, but we'll see how it works.
The Office of Innovation is currently working to recruit a
small business investment company, a venture capital fund to
fund businesses in Indian Country. So, I'll keep you posted on
that, we don't know how that's going to go but it sounds very
promising.
We at SBA are very committed to innovations that will allow
us to serve and to assist the Native American business owners
in Oklahoma and across America. And we thank you for the
opportunity to provide this testimony and I welcome your
comments and questions.
The prepared statement of Ms. Overal follows:]
Prepared Statement of Dottie Overal, District Director, Oklahoma
District Office, U.S. Small Business Administration
Good morning Senator Lankford. SBA Administrator Contreras-Sweet
sends her regards and regrets that she could not attend today's
hearing.
I am Dottie Overal, and I serve as District Director of the U.S.
Small Business Administration's Oklahoma District Office.
As you know, SBA's mission is to strengthen the nation's economy by
enabling the establishment and vitality of small businesses.
Underpinning all of our efforts is the notion of ``inclusive
entrepreneurship.'' By this I mean that we work to ensure that SBA
products and services are available to small business owners regardless
of age, race, gender, geography or socio-economic status.
My testimony today will focus on our work in the Oklahoma Native
American Community through our 7(a) lending, 8a business development,
and HUBZone programs.
The 7a Loan program is the SBA's primary business loan program.
These loans do not come directly from the Agency but rather from banks
and other participant lenders. The SBA guaranty reduces the lender's
risk. Over the past five years, SBA guaranteed over $68.8 million in
loans to Oklahoma Native American firms like Sherrie Schatz of Schatz
Publishing in Blackwell and Carolyn Bahner owner of Expanded Solutions
in Oklahoma City.
The 8a Business Development program is a nine-year program
established to assist eligible socially and economically disadvantages
individuals to develop and grow their businesses. Like Al Alfaro of He
and I Construction in Lawton, OK, a successful program graduate, these
firms are considered small disadvantaged business concerns for the
purpose of federal contracts. Currently the Oklahoma 8(a) portfolio of
75 firms consists of 35 tribally owned firms and 25 Native American
owned firms. On another note, approximately \2/3\ of our State is in a
designated HubZone based on Indian Lands. This designation gives small
businesses located in a HubZone access to federal set-aside contracts
and sole source contracts, as well as a price evaluation preference. We
are currently working with the Oklahoma Bid Assistance Centers, located
throughout the State, to provide hands on assistance to firms wanting
to get into this program.
As you are aware, Choctaw Nation has received a Promise Zone
designation and SBA is currently working with tribal leadership to
bring programs and focused training to the 11 county designated area.
Over the next three months we hold a lender matchmaking event in Durant
and a Native focused 8(a) application training in McAllister.
Our Office of Native American Affairs has been led by Chris James
since 2011.
As part of the White House's Native American Generation Indigenous
initiative, SBA will host a ``hack-a-thon'' event in California later
this year with plans to extend to other regions including Oklahoma and
surrounding areas. We're going to teach tribal youth how to employ the
kinds of business problem-solving skills being used in places like
Silicon Valley.
In addition to the hack-a-thon, the SBA held a roundtable event
tailored specifically for young Native women entrepreneurs in Oklahoma
this past March.
We have also issued LINC, which stands for Leveraging Information
and Networks to Access Capital. LINC can expand borrowing options
beyond your local bank. With LINC, a small business owner can go to
sba.gov and fill out a simple online form in minutes. The form is then
sent to lenders with a regional, statewide, or even national reach.
Within 48 hours, the applicant is either contacted by a lender to meet
or discuss their application. Or else, if no banks respond, SBA will
direct the entrepreneur to a free local business adviser for loan
consulting. We've rolled out LINC to our microlenders and nonprofit
lenders already. American Indian and Alaskan Native entrepreneurs were
the very first group we brought in to test this new technology prior to
the rollout. That's because we think this online service will be
especially beneficial to those who face geographic barriers in
accessing capital.
Later this spring, we'll take an even bolder step toward
modernization when we roll out SBA. One which is the total automation
of our loan application. One of the prevailing criticisms of the SBA is
that it's too cumbersome, time-consuming and expensive to apply for a
loan with us. SBA One will mean the end of fax machines and paper forms
in our application process. Instead relevant loan documents will auto-
populate. The forms can then be filled out online using an intuitive
interface--and then filed using digital signatures. It will
substantially cut the time and cost of applying for SBA capital.
In terms of counseling, we're also going to be pioneering another
innovation this year in Indian country. In 2015, we'll be bringing
growth accelerators to reservations and tribal communities. Last year,
the SBA funded 50 growth accelerators across the country. These are
basically business incubators that help startups quickly launch, scale
up and turn a profit. Accelerators provide a physical infrastructure
where budding entrepreneurs can work and plan. They offer mentoring,
networking, business-plan assistance, and possibly even access to
investment capital. Our Office of Innovation is currently working to
recruit an SBIC venture capital fund in Indian Country that would
invest in the most promising, high-growth tribal businesses. Growth
accelerators are usually found in big cities, but our idea was to
export the Silicon Valley support structure to underserved communities.
This year, the SBA will be funding our first growth accelerators in
Native American communities nationwide. Competition winners will
receive $50,000 to pay for things like rent, office equipment, wifi
connections, or staff expenses. We think this can be a great new way to
increase the numbers of successful startups in Native American
communities.
We are committed to innovations that will allow us to serve and
assist Native American-owned business in Oklahoma and across America.
Thank you for the opportunity to provide this testimony, and I
welcome your comments and questions.
Senator Lankford. Thank you.
Colonel Southard.
STATEMENT OF CLARK SOUTHARD, LIEUTENANT COLONEL (U.S. ARMY,
RET.); EXECUTIVE DIRECTOR, WASHITA VALLEY REGIONAL PARTNERSHIP;
CHAIRMAN, OKLAHOMA
SOUTHWEST ALLIANCE; AND VICE CHAIRMAN, DELAWARE NATION ECONOMIC
DEVELOPMENT AUTHORITY
Mr. Southard. Senator Lankford, esteemed colleagues, and
ladies and gentlemen, thank you for the opportunity to come
here today to talk about economic development. As a economic
developer, this is heaven, believe it or not. We get to talk
about things that are important to what I do for a living and
what we'd like to see in terms of prosperity in Oklahoma,
specifically, since--I'll also be a little selfish here and
Senator, I think you'll back me on that one. We'd like to see
our state grow and needless to say, I'm based out of Southwest
Oklahoma and this is my territory, also as a Native Oklahoman
and a Native American as well.
And what I did--we have a testimony requirement to put it
on paper and it was out in the hall and I listed a bunch of
definitions. And I'm not going to sit here and bore everyone
with definitions on what defines economic success and things of
that nature, but I've got a couple of one-liners I like to use.
But they are in the testimony for the record, because there is
a requirement to have an understanding of what we're talking
about when we talk economic prosperity in Indian Country as a
whole.
Economic success, by itself is a term, is essentially
financial independence and you can take that in the business
world, you can take that in the family world. If you are
financially independent, you're now having economic success.
Economic development is the production of wealth and/or the
growth of ones income inside of a business family organization
region. And there are six principle functions or pieces to
economic development as a model. And you really can't escape
those in any way, shape, or form. The baseline piece of
economic development is always going to be leadership
development, workforce development, and community capacity and
development. Those three things you can define as what makes
the engine turn. Those are the operating pieces at the baseline
you have to have in order to do anything; any kind of business,
any kind of growth. You have to have those things in place.
An example with community capacity development, if you
don't have a building to have your business in, you're behind
the power curve if you want to have a business there.
Workforce is self-explanatory. Had a great opportunity just
earlier today to meet with the Secretary of the Interior. One
of their focuses was on youth in our area--the disadvantaged
youth, specifically. And that is something, we, especially in
Caddo County need to focus on very hard, is getting our kids
trained and ready.
And we heard from Superintendent Hackney (phonetic), a
wonderful presentation on how we struggle in rural Oklahoma to
get that done. It seems like everybody is piling on, but we
produce fine young Americans, there's no doubt about it. It's
always in the economic development world, urban versus rural.
Rural, we're always behind because we don't have the numbers of
people. We don't have the resources at hand, so we struggle a
little harder, but by golly, we can do it. That's the way I see
it.
And then you have the production tier in economic
development and that is entrepreneurial development, which the
SBA and banks help start up. And we're doing that in a business
incubator at Caddo/Kiowa Technology Center, where you start
businesses or you grow them, as some folks talk about
germinating businesses or seed planting.
The other is business retention and expansion, 85 percent
of growth, economically, comes from businesses that are already
in place. This is not something that I made up; this is the
standard statistic you'll read, 85 percent. So you want to keep
your businesses at home and if you have a business here, you
want to help them grow if they want to grow. Because that's
where your primary production is going to be. Then the top
pinnacle item in economic development is business and industry
recruitment. And quite honestly, in Caddo County, we're not
going to lure Mercedes-Benz to put up a car factory at this
side of town. It's just not going to happen here in Anadarko.
But you might be surprised what we can lure in.
But you have to have those other elements in place before
you can go there. You have to walk before you can run. It's
real straightforward and real simple. And do to the constraints
on time, because I could do this all day long--again, this is
my cup of tea--I've just gone straight to some recommendations,
it's in my testimony. And these are Clark Southard
recommendations. And clearly, when you're working with
sovereign nations, they will make up their own minds as to how
they proceed. But I look at it--and in fact, the statistic is,
there's 566 federally recognized tribes in the United States.
There's 39 in Oklahoma; there's 9 in Caddo County. And so, when
you look at the different kinds of tribal structures the
sovereign nations have, it makes it very complex to work with.
And when you're sitting in an office like ours, where you're
dealing with a regional concept of pulling everybody together,
that is enormously difficult. I'll just tell you, it's hard to
do. But there are certain things that I've observed through my
time in this business, that are just general models. And I'm
going to throw them out there for discussion if you'd like--or
my opinion.
When you look at tribal businesses, for them to be
successful, if it is a sovereign nation's business, you have to
create in the tribal structure an economic development arm that
is separate from the tribal political structure. And I'll use
the example of the United States government.
Senator, no harm here. This is just the way it works.
Business is better in the lane of business. Government does
a great job running government. And so you really can't expect
the government to run businesses successfully, that needs to be
in the hands of business.
Same thing for sovereign nations. Your tribal structure,
political and elected officials, that's a great structure. It
has to be there for its needs and purposes, but you need to
have an isolated arm within your tribal structure for economic
development, so that it is sheltered from political change and
whim. Because that's the thing that you see fail first in
businesses in Indian Country. There are some tribes that have
done that successfully; there are many more that have not.
That's observation number one. So the recommendation is create
that buffer. And this one, of course, as--as a Comanche, we
have--our family had an original land allotment and I know how
trust land works and sovereign land works, et cetera. But trust
land by itself is a dual-edge sword. That land is there to
essentially avoid taxes, from a business perspective only. Of
course, there's sovereign nation things and stuff that is
important to tribes. But tax avoidance creates another business
dilemma when you're trying to lure in other businesses or
banks.
As an example, if you go to Montana or you go out to
Arizona, where you have the large reservations, you don't see a
lot of institutionalized corporation businesses inside of those
reservation properties, because they have no legal recourse
there. They cannot go to court and fight for themselves as a
business; and the same thing holds true in land that's put into
trust that wasn't in trust. It was fee simple land before in
this area. If you put land into trust, you're going to have a
hard time getting loans from banks and luring businesses in to
actually do things, because the game has changed. They're no
longer--the businesses or the commercial side is no longer able
to take things to court. If you have it as fee simple land,
that's--everybody--just like business happens in the rest of
the world, so it's a fair playing field or battlefield.
Another piece that's out there about start-up businesses--
and this is one that I just--I'm always running into.
The first rule of business is to have a business plan that
is solid. If you don't have a business plan in place, you're
destined to fail. If you start your business without a business
plan, you've gone about it the wrong way.
The second thing is to have your financials in order. And
if you're--again, sometimes when you work with tribal entities,
those financials are muddled up with tribal monies. Again, you
go back to the lender, the lender is very confused about what
you're doing, where the money sits, who's responsible for it.
So they want to have that separation in place. So, business
plan, financials.
And then the third item that's always there, if you're
going to have something that requires a workforce, you need to
make sure you have a streamline for that workforce to come to
your place of business to conduct work. If you don't have that
workforce in place--again, that's why Mercedes is not coming
here to build cars, because we don't have any engineers here.
But those three things have to be in place.
And then just a piece of advice--and this goes just across
the board--whenever you're starting business or you're trying
to expand your business, you want to capitalize on all the
resources that are made available to you. My colleagues here--
you're hitting it out of the ball park. If we could all sit
down and help any one single business, I think we'd do a great
job, because there's a lot of resources here. But it's amazing,
sometimes folks just don't ask and so, you have to have that in
place.
And then, the final bullet on that one is if you don't have
those things in place, don't try to start a business. You're
just going to lose money. It'll be an outward flow of cash.
And here's the one that's going to be most contentious,
especially in the area of Southwest Oklahoma. When you look at
the model in the state of Oklahoma, the 39 tribes, the ones
that have done away with blood quantum for membership have had
enormous membership growth, it's just a dynamic. Those are also
those tribes that are most successful from a business model. If
you're still doing blood quantum, technically, over time,
you'll be anthropologically extinct over a period of 500 to
1,000 years, so you have to consider that. You have to consider
that in the way your tribe is going to grow. You can still have
cultural things in place, there's never been a problem with
that. But that's one of the hurdles that I see--the successful
tribes have done away with that.
And the other is, in the world of gaming. Gaming is
speculative business. It does provide money and revenues for
tribes and you certainly don't want to push that away. It's an
available cash cow, if you will. However, it is not true
economic development, because it's based on speculation. People
can stop gambling anytime they want. Whereas, if you make a
product, you're hopeful that the demand that will be there, so
people will come. But when you do have gaming, the distribution
of those earnings and per cap distributions--the tribes that
are successful don't do that. The tribes that have difficulties
are still giving that out. Those monies are better off served
to create workforce development opportunities, such as
scholarships for education, building health care facilities to
better serve tribal members. That way it still comes to the
tribe and individuals can tap into that once they've reached a
element of success themselves. And so, what I wanted to do
there with my recommendation was to get them out front, because
those will be the ones that I want to have come back at you.
Because I realize that there's a lot of different opinions on
that and mine are based on the mechanics of economic
development, not personal opinion, more than anything else.
That's just--this is the way the rules lie on the table. If you
want to see success, you'll see those models are going in that
fashion.
So, I'll stop there, Senator. Thank you for the
opportunity.
The prepared statement of Mr. Southard follows:]
Prepared Statement of Clark Southard, Lieutenant Colonel (U.S. Army,
Ret.); Executive Director, Washita Valley Regional Partnership;
Chairman, Oklahoma Southwest Alliance; And Vice Chairman, Delaware
Nation Economic Development Authority
Honorable Senator Lankford,
Sir, I am honored to have the opportunity to address the United
States Senate Indian Affairs Committee in this field hearing session
today. I am a native Oklahoman, as well as a Native American; being
both Comanche and Choctaw.
Experience and Credentials
I currently serve in the capacity as the Executive Director of the
Washita Valley Regional Partnership (WVRP), which is a private/public
economic development organization covering the rural area in and around
Caddo County, Oklahoma. WVRP's partners are: The City of Anadarko,
Caddo County Industrial Authority, Caddo Kiowa Technology Center, Caddo
Electric Cooperative, Western Farmers Electric Cooperative and Public
Services of Oklahoma.
I also serve, having been elected by my peers and colleagues, as
the Chairman of the Oklahoma Southwest Alliance, which is a twenty
county economic development consortium covering the twenty counties
west of I-35 and south of I-40 in Southwest Oklahoma. We are primarily
comprised of economic development professionals, mayors, city managers
and other partners interested in the economic growth and prosperity of
the southwest quadrant of our state.
I am a member of the Comanche Nation and am a Choctaw descendant as
well. I am a graduate of the University of Oklahoma's Economic
Development Institute. A member of the Oklahoma Economic Development
Council, the International Economic Development Council, the Oklahoma
Southwest Alliance and the Southwest Oklahoma Impact Coalition's Front
Line Team. I am further honored to be the first non-Delaware to serve
on the Delaware Nation's Economic Development Authority. I hold both
undergraduate and post-graduate degrees and served proudly in the
United States Army for twenty-nine years both in peacetime and in
combat.
Accordingly, I feel well qualified to address issues regarding the
economic development environs within which our proud Native American
nations lie not only here in Southwest Oklahoma, but in Oklahoma and
the United States as well.
Definitions
Economic Success. Defining economic success is vastly different
than saying we have some tribal businesses that are still open. Native
American ``self-determination'' is often heralded as a key ingredient
in an over-arching belief that this leads towards either tribal or
individual financial independence. Needless to say, tribal and
individual definitions are also, vastly different. Economic success
varies from a macro to the micro perspective as much as financial
independence varies from tribal to individual. A basic understanding of
these precepts is important, if one is to assign a value to the claim
of economic success. Accordingly, I will present both a tribal and
individual level set of standards for testimonial purposes.
Tribal (Sovereign Nation) Economic Success would exist when a tribe
is functioning a level beyond simple sustainment in its ability to
provide for its people.
Tribal Financial Independence would exist when a tribe is
functioning at a level that displays true competitiveness in a global
economy and excels in its ability to provide for its people without
outside (read Federal Government) funding.
Individual tribal member and/or business success does not have the
requirement to provide for a people. This micro level is qualified as
providing for oneself, one's family or one's business.
Individual tribal member and/or business financial independence
results when there is no longer a requirement for any sort of financial
assistance from the government. Financial independence is displayed
when an individual earns their income solely on salary, profit or
investment. The business model would display success when it is earning
its income on a business profit and loss statement in an open market
without tribal and/or federal monetary assistance.
Economic Development. Economic Development is the process of
creating wealth through the mobilization of human, financial, capital,
physical and natural resources to generate marketable goods and
services. This academic definition for economic development generally
applies to entities beyond the individual or individual business. In
this testimony, we are referring largely to tribes or sovereign
nations. However, as is the case with the federal government, tribal
governments are not equipped with the skill sets to create wealth with
the legislative bodies. Federal and tribal governments, that are
successful models, have established internal agencies that help guide
the environment to provide for a situation where wealth creation can
occur. In the proper environment, in our nation, the open market,
business people will either win or lose in the world of business. The
open market is driven by supply and demand of goods and services.
Six principles of economic development. There are six key
components of economic development that are widely accepted in the
economic development community. These principle components must all be
in place for there to be true economic growth and wealth creation.
These principles are: Workforce Development, Leadership Development,
Community Capacity Development, Business Retention and Expansion,
Entrepreneurial Development and Business and Industry Recruitment. The
baseline requirements for economic development are the first three;
workforce, leadership and community capacity development. Without those
three in place, the business development components are meaningless.
The primary production tiers are business retention and expansion
(which accounts for 85 percent of all business growth and development
in the United States) and entrepreneurial development. The final tier,
business and industry recruitment is the pinnacle of economic
development. It only happens when all of the other five elements are in
place and working well.
Observations and Recommendations
I. Personal observations are replete with exceptions, contrary
examples and false perceptions. I do not discount that; however, my
experience and observations come with the aforementioned credentials
and professional acumen in the area of economic development. In the
world of business, there are winners and losers. Government policies
can alter the environment and amend competition to favor disadvantaged
demographics; however, in the open market there will still be winners
and losers.
Tribal Sovereign Nations create separate governmental constitutions
and tribal structures for prosecution of the will of their inherent
population. There are 39 federally recognized tribes within the State
of Oklahoma, each with its own individual constitution and structure.
There are 9 federally recognized tribes within Caddo County, Oklahoma
and they are the Comanche, Kiowa, Apache, Wichita, Caddo, Delaware,
Fort Sill Apache and the Cheyenne-Arapaho. Several of these regional
tribes have suffered nearly complete collapse in their governmental
structure within the last five years. Several of these regional tribes
have also suffered loss (bankruptcy) of their gaming institutions and
its flow of speculative dollars. At least one, is now dealing with
abject corruption in its former leadership and will continue to suffer
the consequences of direct interference from tribal politics in its
otherwise functional economic development arm. Sadly, this kind of
failure, when related to the world of business is a red flag and
accordingly, there is a reticence from the external business community
to have anything to do with these or any Native American tribes.
Recommendation: For tribal businesses to function and compete
successfully in a global market environment, a tribal structure must be
in place that buffers tribal businesses from tribal politics.
II. The ``Trust'' and/or ``Sovereign'' land dilemma. ``Trust'' land
is a two-edged sword. The advantages of ``Trust'' land for some Native
American enterprises is that of tax avoidance. Solely owned Native
American businesses, such as gaming institutions, use this to
advantage. There are certainly unique examples of other businesses
flourishing on ``Trust'' land. However, free market (non-Native)
businesses largely will not invest in nor partner with businesses on
``Trust'' land. They perceive, and rightly so, that they will have no
legal recourse nor actual ownership in a business that is not on ``Fee
Simple'' real estate.
Recommendation: Move ``Trust'' and/or ``Sovereign'' land out of
trust to attract free market investment and partnerships. Laws that
govern business in the open market still apply and legal recourse is
available to both parties involved.
III. There has been a regional tendency to create businesses
without first doing the business basics. The standard metric for new
business start-ups is a failure rate of nearly 80 percent both
nationally and internationally. It is a tough prospect to take a
business from ground zero to actually being clear of red ink and
showing a profit. For the record, there is also a tendency for
government programs to push start up ideas and grants on tribal
entities that are not set up to run and manage a business. The idea
sounds good or the money looks great, but the reality is that business
basics are a must.
Recommendation: Follow business basic guidelines with start-up
businesses.
1. First priority is always a solid Business Plan.
2. Second priority is always to know and have your financials
in order.
3. Ensure your workforce is in place before starting or
investing in a business.
4. Use all available resources for entrepreneurial and business
start-up efforts.
5. Do all of the above or DO NOT start.
IV. Tribal Entities which have gained real market share in the
world economy and have seen actual tribal and economic growth have made
two specific changes to their internal membership structure. These
changes have been the paradigm shift from economic stagnation to
economic success on par with modern, competitive businesses nationally
and internationally. The key features of these changes have been the
ability to grow demographically, which equates to strength and
resources and the ability to invest in workforce development. These
positive changes are:
1. Membership eligibility has been changed from ``Blood
Quantum'' to ``Legacy/Decendancy''. Those tribes that have
remained blood quantum oriented have stagnated and/or declining
growth. Anthropologically speaking, they will eventually become
numerically extinct.
2. Per Cap distribution from gaming revenues to tribal
membership was stopped and those funds were invested in
education and workforce development programs for tribal
workforce growth and in medical/health care facilities to
improve healthcare and quality of life for their tribal
members.
Recommendation: I strongly urge Native American sovereign nations
to enact both of these critical changes. The results are immediate and
positive.
Sovereign immunity remains at the core of the divide. The Non-
Native business community will simply never feel that the environment
is equitable in a market place when favoritism is being exercised.
Business waits for no one. Competitive businesses have learned that the
easiest way to deal with sovereign immunity issues is simply to avoid
them. Accordingly, economic development does not occur ``naturally'' in
the closed market caused by sovereign immunity in regions where that
exists. Always remember, ``Change is inevitable, progress is
optional.''
Senator Lankford. All right. Thank you, to all five of you.
I'm going to open this up to questions and I'm going to throw
questions out to each of you. If any one of you wants to
contribute to what someone else has said; agree, disagree,
whatever it may be. This will all go on the record as well, so
feel free to be able to jump in on that one.
Mr. Kouplen, let me start with you. How can tribes leverage
land held in trust to gain financing from banks? This has been
an on going economic development question. Once that land is in
trust there's capital there, but can't actually tap into that
capital. So how can that happen?
Mr. Kouplen. Well, the Lieutenant Colonel said it very
well. It makes you very nervous, from a--and I'm on both sides
of it. I live in this very unique world where I am the lender,
where we are looking at projects that we want to finance. And
through my involvement with Creek Nation, I understand the
benefit of putting property in trust, so I see both sides.
Often, if the tribe will agree to waive sovereignty, there are
legal ways to--for the bank to get comfortable making that
loan. And just so everybody understands, it's really basic
economics. This issue is--what you don't want to have happen is
you make--all we do as banks, is buy and sell money. We buy
money in the form of deposits, we sell it in the form of loans.
We make a net profit of roughly one percent as an industry, so
it's a very thin margin industry. So, what you can't afford to
do is make----
Senator Lankford. So you don't own all the money in the
bank?
Mr. Kouplen. None of the money.
Senator Lankford. That's what I've always heard.
Mr. Kouplen. That's a huge misnomer. My children think we
have more money than we do and I tell them it's all other
people's money. It all just goes through, so--but what you
don't want to have happen is, you don't want to loan money on a
project, have the borrower not be able to pay it back and then
have no collateral in which to pay it back. So, I would say the
best case scenario that I've seen--and I would say many banks--
they just won't go there. The risk is just too great. They
don't want to get embroiled in a legal controversy whether it's
in tribal court or wherever--so, they'll just avoid this type
of lending. Some, however, including us will, if there is a
waiver of sovereignty that's very clear and understandable
between both parties and we agree that if something happened,
it would be adjudicated in, you know, traditional court, then
you can get past it, but it's tough.
Senator Lankford. Colonel?
Mr. Southard. I'd like to jump on that, again, since I kind
of brought it up in one spot. I spoke with two district judges
in the last week, actually, about this very thing and just
because you waive sovereign immunity in the contract is at the
end of the day, meaningless. It can still come back to the
district courts and then it'll be moved over into the BIA court
system. And so, lenders know that, and your attorneys know
that, and so they're going to be very reticent about moving
forward with those kinds of loans or doing investments on trust
land. And it's a common misconception that you can't move
things that are in trust land out of trust. That's doable, just
as you can do the reverse in some cases. You can get land
placed into trust if you just stay out of that lane. It's like
a switch, on/off. If you stay out of that lane, you're opening
yourself up to opportunity. If you go into that lane, you've
closed a door and you can't blame banks. I can't. I mean, we
try to work as tightly as we can with our lenders in our
region. But I would caution one from thinking that you can't
still file the suit and end up in the BIA court system, where
then, you would just lose.
Senator Lankford. So then how can people build capital on
access and build capital over time? Because part of the
challenges for economic development, if you own a business,
running a business, that business is now collateral or that
home is now collateral, be able to do loans against that and
continue to accelerate your wealth. If it's not possible to do
that--if a business or a home or whatever it may be, is still
locked into that system, you can't build a growing sense of
wealth. So, how can someone, whether it be a Native American or
a tribe, start building that capital wealth?
Mr. Kouplen. Just don't put the property in trust in --
Senator Lankford. So, you're talking about trying to have
both--some things you have in trust, some things you don't have
in trust?
Mr. Kouplen. Right. Most of your--I've--I don't think--I've
never run into--we loan to many, many Native American
borrowers. And from a private business perspective, it's a non-
issue. Their businesses, their land is--we've never run into it
being in trust. It's only when you're loaning money to the
tribe itself. And, then--and I would just say to his point, you
just got to have some of both. Keep it--putting it in trust
provides you great protection, tax benefits. I mean, there's
lots of reasons to do it, but you probably just ought to have a
mix.
Senator Lankford. Okay. Mr. Narcomey?
Mr. Narcomey. In my experience with tribes--and Lieutenant
Colonel said it really well--you know, I belong to the Seminole
Nation and I was on the Economic Development Committee for the
Seminole Nation for four years. And the frustration that I felt
was I couldn't separate the--you know, we were tasked to
develop business. Well, when I started, we ended up, you know--
Kelly Haney (phonetic) had nominated me for that position.
Well, when we--SNDC, Seminole Nation Division of Commerce, we
found that we were in--you know, fines with the National Indian
Gaming Commission--that we had a bunch of these fines that we
had to pay back. Well, that limited any capital whatsoever that
a bank would loan. So we were hamstrung, we couldn't, you know,
start a business. We had no money.
And what Lieutenant Colonel also mentioned is you've got to
have some autonomy away from the tribe. It's got to be a
separate entity with its own, you know, separate--you know,
organization that can make decisions, because every decision
that we had to make had to go in front of the General Council,
well there's 14 bands, two members per band. So, anything that
we wanted to get approved had to be, you know, of the approval
of 28 members. Some of those members, you know, were--they're
band members. They're there for a reason. Sometimes, it's--you
know, it's family that gets them, you know, to be a band
member. So a lot of folks--and I'm not knocking the Seminole
Nation, I think it's the way with a lot of tribes--aren't
business savvy enough to be able to make decisions. They just
make it based on fear or some other decision. So anyway, we
couldn't get anything done from an economic standpoint at all.
The Seminole Nation Division of Commerce just disbanded. We're
relying now on gaming and I think, you know--I think it's
highly speculative. And so I just--you know, we didn't win. You
know, we attempted it and then there was a--you know, the Chief
changed. There was another Chief that came in--from Chief Haney
to Chief Harjo, and he just had a different philosophy also. So
it, you know--I've went to a lot of--I was trying to find a
business partner that was a tribe, to come to the table with me
to do work with the Corps of Engineers. But what I found is
they were either, you know--they either had that situation
where they were, you know, too tied to the tribe and they
couldn't make decisions. But bonding companies will--you know,
it's like banks, bonding companies, you have to put up payment
performance bond. That surety wants collateral. They want to
know that there's a waiver, you know--waiver of sovereign
immunity. And Seminole Nation won't do it, so that's another
problem. Thank you.
Senator Lankford. Okay. Let me keep going. From an economic
development point of view, what can tribes do to become more
economically diverse? So when you're thinking about ideas here,
expanding the diversity of economic development, what are some
of the things out there or what ideas would you propose?
Mr. Kouplen. You know, I would echo a couple of comments
that have been made and one that I would add. First and
foremost, when you see this economic development separation
work, it's really cool. I mean, we have a visionary Chief
through the Creek Nation that said, hey, let's separate and
create Onefire Holding Company and gave the LLC tremendous
autonomy. So I would, one, echo the--I think that's first and
foremost, because you have significant--in many tribes, you
have significant resources coming in through gaming. And if
those resources can be invested into, you know, for-profit
businesses that create jobs and can bring, you know, prosperity
into the nation. That's great for everybody, but what happens
is the politics gets--gums it up so much and keeps that from
happening, so I would mention that.
Two is, I would go back to when the country was going
through our recent recessionary times, the worst of the worst,
you saw the SBA step up and provide great relief in many ways.
They provided 90 percent guarantees to many loan programs,
which made it that much safer for banks. They lowered their
fees for the borrower and for the bank and they--it was just a
wonderful way to allow a bank to take appropriate risk and get
dollars out the door to potential borrowers. And I would see
the same thing working for Native American entrepreneurs. You
know, I mean, if we really as a country wanted to make a
commitment to Native American entrepreneurs, we could do that
through doing that same type of program for businesses that
were 51 percent or more owned by Native Americans. That would
be my thoughts.
Senator Lankford. Okay.
Ms. Overal, Mr. Kouplen mentioned earlier, we have more
programs than we can actually get out the door and let people
know about. SBA has a tremendous number of programs, you
highlighted several of those. How can we get the word out on
more of these different opportunities that are available to
tribes or individuals to be able to start business--have some
of those guarantees? So what's the best way to be able to
articulate some of these?
Ms. Overal. Well, I would say one effort that we have in my
office right now--I recently was able to staff up, and so we
have a great economic development team now and we're getting
out and networking with other organizations, such as the
Colonel's group. And trying to work together, because there's
more strength in a telephone book than a few sheets of paper.
And so we're trying to work together and educate each other, so
that I know what you're doing and you know what I'm doing. And
maybe I can't help you with exactly what you need, but maybe
you can and I can refer you. So, that's one effort that I
personally have going with my staff and we're working with the
Oklahoma Department of Commerce to do that also, and some other
Federal agencies.
Senator Lankford. Okay. For you and Mr. Narcomey as well,
the 8(a) program, what ways can it be improved at this point,
to be able to, both, help individuals that are in it succeed--
--
Ms. Overal. Yes.
Senator Lankford.--but also help people graduate? As you
all graduated and are a successful business----
Ms. Overal. Yes.
Senator Lankford.--that still exists. There are lots of
opportunities as there are for lots of small businesses. They
start, they run, then they fail at the end of it.
Ms. Overal. Yes.
Senator Lankford. It's a very difficult process to launch a
business in America.
Ms. Overal. Yes.
Senator Lankford.--but many people have done it, and to be
able to actually pull it off with a lot of mentors and help and
other folks.
Ms. Overal. Yes.
Senator Lankford. So what are some of the keys of success
of getting an 8(a) out there and then surviving on their own,
past the expiration in nine years?
Ms. Overal. Okay. First of all, working with individuals
who are interested in getting into the program--Frank, when you
applied it was a paper application, I believe. Well, now it's
an online application. That's much more efficient but, again,
some people need a little help in getting that application. I
also like the fact about what you said, Frank, about mentoring
others, that's so important. I, as a Federal employee, could
tell you, oh, this is a great program, you need to do this, you
know, say okay. But if Frank says it, I walk that walk, I talk
that talk. So that's another way of getting the program out.
SBA is working harder to do some more trainings, more focus
trainings, like this one training that I have coming up in
Durant. It's focused on Native Americans; tribally owned and
Native American owned firms, so it's specialized training. And
that will take place in--I think it's the end of June, early
July. And maybe I need to do some more of that in Oklahoma.
Senator Lankford. How are you getting the word out to the
tribes?
Ms. Overal. How do I get the word out? Okay. We're doing a
lot more using social media. We're doing a lot more with a
program called ``doc gov delivery'', where we can put something
out to 5,000 people. These are individuals who sign up to
receive information from us. And so we put it out on that and
that's been very effective.
Senator Lankford. Okay. So individuals that are here, how
would they get that information?
Ms. Overal. How would they get the information? They could
visit the SBA website--is www.sba.gov, that will give you the
national website. And you can actually hone in to just Oklahoma
or any state. We now have that site in Spanish also.
Senator Lankford. Okay. Great.
Mr. Ruttman, let me ask you about preparation. There are
unique challenges dealing with Native American students coming
through the program and how are you addressing that for
economic development for workforce preparation?
Mr. Ruttman. Well, I, again, just kind of touched on the
surface of a lot of what we do at Caddo/Kiowa. One of the
challenges that people have to attend school these days--Native
American communities not the only one with this challenge--but
child care. We have a 120 certified-size child care facility--
three star. And it's not unusual to see a young person get off
that bus with three children in tow--or carrying. We go infant
through pre-K. So that eliminates a little bit of a roadblock
there and I will say that Kiowa tribe in particular actually
funds a staff member for that, but it's a pretty large
facility. The students we get in, so many times have financial
challenges that we can't begin to fathom, just what they're
going through to come to school and so we try to work through
that to help them. We even have a foundation that helps when
there's just no money--that they just can't do anything. And
one thing that we don't talk about just a lot, but we have a
13th, 14th year scholarship. Any student that went to school in
this district, this region, up until the time they turn 21,
they can still attend our school free of tuition for full time
programs--the high school age ones. Everything we do is to try
and prepare them to be ready to go into the workforce. And I
can't stress enough, we're happy to have people come back for
continuing education their entire life, but our goal is to put
them in the workforce. So, again, we follow up with them; we do
it one year out, we do it two years out. Sometimes as far out
as five years, to make sure we're training and giving them the
skills they need to be successful.
Senator Lankford. So you feel confident what you're
training them for there actually transitions easily into the
workforce--that you're preparing them, not for a job that
doesn't exist, but for a job that does exist and the skills
they need to do that?
Mr. Ruttman. Yes. Yes. We not only are pretty confident
about it, but we have a lot of companies that come in our doors
to find out how they can get some of those employees. I'm going
to, I guess, brag a little bit on our welding instructor. He
turns out more state certified welders in Fort Cobb, Oklahoma,
than any technology center in the state of Oklahoma. Now, we've
got 32,000 people in 1,954 square miles and we're training more
state certified welders. Well, if you're going to the oil and
gas industry in particular, you better have that card. He goes
the extra mile to get that done. And we have students that
leave there probably the bottom end, at about $40,000 and we
had them leave there as high as $90,000 a year. Pretty good
deal for somebody to start out, so --
Senator Lankford. That's great.
Mr. Ruttman. we're pretty confident in what we do and
always--I guess I left out, we have what we call business and
education councils there. They don't--that's business owners
that not only come in and talk to our students to try and
recruit them, but to tell us what we need to be adding to their
training to make sure they're ready.
Senator Lankford. Okay.
All right. Mr. Southard--Colonel Southard, let me ask you a
personal question on this. What does the Federal government
need to do to get out of the way of tribes, where they're in
the way of economic development? And I promise I won't take it
personally.
Mr. Southard. Yeah, but we're recording this; right?
Senator Lankford. Yes, sir. We are. Actually this is a good
thing to have on the record, so what I'm looking for is there
are things that a tribe could do or a tribal member could do to
advance, except for that. It slows it down and makes it more
difficult, makes it more complicated, it adds another layer or
bureaucracy to it. What can the Federal government do away with
to help tribes in their economic development?
Mr. Southard. That's like a bear trap. I really don't know
that I have a specific thing that you could take away today. I
do believe that--and I kind of talked to this a little bit in
my testimony written piece--that for years we've talked about
self-determination is the objective of what things the Bureau
of Indian Affairs does--the oversight committee would like to
see. The reality is it's still going to be about individual
effort to make economic success occur. And then, when we talk
definitions, your being financially independent as a family, as
a tribe, as a business, is your goal. And so, what that also
implies is you are moving away from having government programs
that support you in that effort, that's a real tough one. You
know, there's a mentality sometimes when you have things that
come to you in government programs, well, we can ride this for
as long as it'll stay. I think all of us have observed over the
last several decades that Federal monies are getting smaller
and smaller every day. So, one day that will run out or could
and if you haven't created something to stand on, on your own,
then you're going to be standing there like with the musical
chairs thing and there's not going to be a chair to sit down
in. And so I think what's important--part of that mission said
that the Federal government probably ought to have is how do
you start eliminating those programs that make sense to
eliminate--to wean that dependency on Federal structure.
However, at the same time, the opportunities under the 8(a)
programs and so on, are enormously important to take
disadvantage businesses and disadvantage people when they're
truly disadvantaged, to give them an opportunity to get to work
and get things done. And we've had some good success out here.
I don't want to be the grim reaper, I am not. The reality is
I'm all over trying to create positive economic advancement.
And in the Delaware, as an example, since I do sit on their
Economic Development Authority Board, we have had some real
good 8(a) businesses that have gone from mentorship programs
into successful, on their own programs, and are now mentoring
other businesses. So, those things do happen and the advantage
does run out--I believe it's ten years when you----
Ms. Overal. Nine years.
Mr. Southard. Nine, when you actually run out of your
advantages in a 8(a) program. But at that point, they're ready
to roll and there's positive growth. And that's the kind of
thing you need to be shooting for as an objective and the
government ought to have that as a target for probably every
program that's out there like that.
Ms. Overal. And Senator, may I add, the 8(a) program--there
is--there are no extensions. So it's not one of those programs
that you can apply for an extension; 9 years, its over.
Mr. Southard. Right.
Senator Lankford. What have you seen, as far as the success
rate in the 8(a) programs, as far as, at the end of that 9
years; by your 10, 11, 12, that business still exists?
Ms. Overal. Well, hopefully--this is a business development
program.
Senator Lankford. Right.
Ms. Overal. We work with the clients throughout the 9
years. Hopefully, if we've done a good job, they--we've taught
them how to go after those contracts themselves, without the
aid of the government. So at the end of the 9th year, they
should be ready to be on their own and as we're in the
program--as a--as a business in the program, each year we're
forcing them to have more eggs in their basket, not just
waiting for us to help you get a contract.
And I think, Frank, you're a perfect example on that, of
how that worked. I mean, it sounds a little tough, we're
saying, hey, the mix in your basket isn't right. You've been in
this program for five years, it's time for you to have more
that you've gotten on your own. Be looking at some private
sector contracts.
Senator Lankford. Right.
Mr. Narcomey. Senator, I can add a little bit to that. I
argued with Dottie's office one time about I didn't meet--there
was a time when I did not meet the specified--I think I was in
my 6th or 7th year----
Ms. Overal. It was probably about 6th--yes, about that.
Mr. Narcomey.--and it was--I had to meet the 35 percent,
non 8(a).
Well, I was doing some work at Tinker, Department of the
Air Force. They went through the Corps of Engineers. And, you
know, we were doing a good job and I think we--they liked us,
you know. We were doing what we were, you know, supposed to do,
on time, and we were taking care of the customer. We were
rewarded with more work. Next thing I know, we were getting
quite a bit of 8(a) work. Well, I'm--my 35 percent over here,
it's tough, it's tough.
And so, Dottie, what I did is--my son was the center on the
football team. The Edmond School Board over construction, his
son was the quarterback at Edmond. So I went to him and I said
if you got anything we can bid, we're going to bid it, because
I want--at least I know who I'm dealing with. You know, I'm
dealing with, you know, some--an individual I know. Well, we
bid that school work at nothing and barely got it. And I think
we might have broke even on that work, Dottie, but it kept us
in the 8(a) program. And so, our growth was almost--I mean, we
were almost inverted and that's the--that was the scary part. I
mean, I think we did a very, very good job taking care of the
customers. We were the ones on the ground, dealing with the
customers. We assisted the government in finding solutions to
problems. I think that's why they liked us and then when we
left the 8(a) program, it was like, Frank, how can we get to
you? How can we have your services? That's how--you know, I
thought, well, perhaps, you know, if I gave back what's been
given to me to a tribe or to, you know, another individually
owned 8(a), that would allow me to participate in the program
and stay with the customers that I, you know, have been with.
So that's what we've done.
But today--the issue I have today, Senator, is small
business. There is so much competition for the work. There are
women owned, HubZoned----
Ms. Overal. Service connected, disabled vets.
Mr. Narcomey.--service, disabled, veteran owned small
businesses. And, you know, there's only so many dollars. So,
what I'm fighting is, hey, I'm Native American, you know, I'm
Indian, you know, I need work. You know, please don't forget
me, I'm small business. That's what I'm having to go to my
government counterparts and say, wait a minute, I mean, I know
you've got these check marks to do, I know you got these
percentages and goals; but please don't forget small business.
And that's where we are right now, I feel like we're being, you
know, a little left out. You know, my feelings are a little
hurt because everybody else is more important. And that's where
I'm having a rough time right now, is I think we do--we have
probably leaned hard on, you know--more towards government
contract. And I think we're--you know, we do a good job. So I
don't want to ignore that, but how do I stay in it? That's
that's what I'm working with right now.
Senator Lankford. All right. Let me give you a final
question, because we're going to get close on time here to try
to wrap up. But I do want to leave this out here.
Oklahoma tribes have been incredibly successful on the
whole and there are many things that can be shared with other
tribes. Of the 566 tribes across the nation, to say here are a
couple of ideas that a tribe has done or that you have seen
done, that you think that's a great idea for economic
development. Many of those you've already shared during the
course of this conversation. If there is a single idea or a
couple of ideas that you'd be willing to share--just to make a
brief comment on, to say this is one of the secrets of success
that we have seen among some of the Oklahoma tribes, for the
secret, either members--individual members or tribes as a
whole, to economic success that you think could be shared with
the entire nation. Anyone who can share in any order.
Mr. Kouplen. Senator, if you don't mind, let me cheat and
go back, because I really want to share. You asked what the
Federal government can do. Please let me just share three
things.
One is small businesses look for certainty. They look for
certainty. They don't like to wonder whether or not a tax
credit is going to get extended or a program is going to get
extended or that the budget is a year late or two years late.
That's number one, so providing them with certainty so they
understand the rules from year to year.
Minimizing the red tape, mostly from a regulatory
perspective, is brutal. I mean, you're trying to make a living.
I mean, you see the passion that Frank is talking with, I mean,
he's trying to make a living. He doesn't need inspectors, you
know, out creating rules to put him out of business.
And then finally, fiscal responsibility. Investors would be
a whole lot more excited about investing if we knew that our
government was solvent and that we could actually pay our bills
and balance our own budget. So, I would just share that,
unsolicited, with you.
Senator Lankford. Great.
Mr. Kouplen. As far as the number one thing that I think,
I've watched the Creek Nation do, is hire great people and we
visited with the Council. We always want to hire Native
American, but what I have seen is when we're hiring
professional positions, they said get the best--get the best
talent. And so, the greater the talent within the tribe, the
more successful it has become, no matter the race of that
talent.
Senator Lankford. Okay. Other ideas?
Mr. Ruttman. Well, I might throw something in and it really
goes out to the tribal leaders in the room. When we started our
economic development operation, one of the things we charged
Mr. Southard with was to try and form stronger partnerships
with our tribes. We have a huge resource in the tribes in
Southwest Oklahoma and he's had success with a couple of
tribes. But I guess my charge to you would be--you might not
think we can do you any good but I'd say if you wanted to make
a call to Clark and open that door to maybe partnering on doing
some things, I think that door would be open.
Clark, would you----
Mr. Southard. Absolutely. And I think I've just got a--it's
some quote I picked up from somebody, somewhere along the line.
Change is inevitable, but progress is optional. If you don't
posture yourself for progress you're not going to have it,
you're just going to change. And that change can be the same
old, same old, same old, here in rural Oklahoma, unless you
posture yourself correctly. So--and absolutely, we--I would
look forward to further operations and activities with the
Native American people out here, that's my family as well, so--
not as many Comanche up in this part of the neck of the woods,
but they're at the southern part of Caddo County. So, there you
go.
Ms. Overal. I would say the tribes need to work with the
youth, because that's our future, and expose them to
entrepreneurship. Some tribes are doing a really good job of
that right now, having entrepreneurship programs in--sometimes
even in the junior high school and the high school, because
that is a great option for our young folks.
Senator Lankford. Okay. Any last minute comments?
[No response.]
Senator Lankford. Thank you all for being a part of this
conversation. This is a very important conversation. It's a
conversation we've had in D.C. in multiple hearings. We'll have
additional field hearings in other states and locations to be
able to gather ideas. As we gather all these ideas and put them
on the permanent record and the congressional record, it's very
important as we go forward in the days ahead, as we write
legislation, work with BIA, BIE, SBA, all the different
entities, to be able to determine what's the best way to be
able to help our tribes.
For those of you that are tribal leaders and elected
officials, thank you for being here and the way that you invest
in your tribe and the leadership that you're providing to
people. That is a thankless job in many ways. I understand,
I've been elected as well. I understand the challenges that are
there. You have spent a great deal of your time serving, so
thanks for doing that.
For those of you that are here, if you have additional
ideas, I know the tribal leaders that want to be able to submit
things. I'll leave the record open for the next two weeks, so
that we can extend the record with your comments and ideas. And
we'll be glad to be able to receive those.
With that, we are adjourned.
[Whereupon, the hearing was adjourned.]
A P P E N D I X
Prepared Statement of the Citizen Potawatomi Nation
On behalf of the Citizen Potawatomi Nation, thank you for the
opportunity to submit testimony before the U.S. Senate Committee on
Indian Affairs oversight hearing on ``Advancing Economic Success in
Indian Country.'' The Citizen Potawatomi Nation is the federally-
recognized government of the Citizen Potawatomi people and exercises
governmental jurisdiction in the 900 square mile area bound by the
North Canadian River, the South Canadian River, the Pottawatomie-
Seminole County boundary on the east and the Indian Meridian on the
west. Government leadership consists of a three person executive
committee, Tribal Chairman John ``Rocky'' Barrett; Vice-Chairman Linda
Capps and Secretary/Treasurer D. Wayne Trousdale, and a 16 person
legislature representing more than 32,000 tribal citizens.
Introduction
With nearly 40 federally recognized Tribes, Oklahoma, formerly
called Indian Territory, is home to the second largest Native American
population in the United States. Tribes in the U.S. have struggled for
decades to make economic dreams a reality and to care for tribal people
and communities. From jobs to healthcare services to education
assistance, this focus on the Oklahoma community is more than just a
benefit for Native Americans; it is a cornerstone to our state's
successful growth in the past decade.
The foundation of this growth rests on the principle of tribal
sovereignty, a right which was granted to tribes across this great
country as a tool to promote economic growth. Tribal land is governed
by federal law, which allows tribes to host a number of businesses and
enterprises. Although many believe that tribes are wealthy because of
gaming, tribal leaders recognize that tribes must diversify businesses
to be successful and provide opportunities for our citizens and the
communities across Oklahoma. Tribal governments should not be required
to depend solely on gaming to build economic sustainability. The
Federal 477 program has provided a great resource to get individuals
jobs ready and has been great for economic development, however, there
is much more to economic development in Indian Country.
Citizen Potawatomi Nation Economic Development
Citizen Potawatomi Nation has created many tribal enterprises in
order to achieve economic sustainability. CPN owns FireLake Discount
Foods, the largest tribally-owned grocery store in the United States.
It also owns the largest tribally-owned national bank chain, First
National Bank and Trust Co. with seven banks in the state. Other tribal
enterprises include a Cultural Heritage Center, FireLake Golf Course,
FireLake Ball Fields and the Grand Casino Hotel and Resort, which have
become popular destinations for Oklahoma residents and out of state
tourists. The Citizen Potawatomi Nation has been generous with its
success. With a $558 million economic impact in 2013 and more than
2,200 employees, the tribe is the economic engine in its jurisdiction
in Pottawatomie, Oklahoma and Cleveland counties.
Since 2003, Citizen Potawatomi Nation has created seven of every 10
jobs in the City of Shawnee. CPN also spends 30 cents of every tribal
dollar spent in Shawnee and has brought nearly $300 million in Federal
dollars to the State of Oklahoma.
According to the U.S. Census Bureau, one in every four Native
Americans lives in poverty. Although the Citizen Potawatomi Nation
cannot be all things to all people, the tribe goes to great lengths to
help when there is a need. Since 2005, CPN has given more than $5
million to nearly 200 community organizations and community groups in
the surrounding areas who serve Native and non-native alike.
On a monthly basis, the Citizen Potawatomi Nation's Health clinics
see more than 1,700 patients. This includes 250 behavioral health
appointments, 500 lab tests and 250 x-rays. In the last two years, the
CPN dental program has doubled in size, making it the best of the best
in terms of staff and dental technology. CPN has also added physical
therapy and optometry services in the past year.
The CPN tribal police force acts as first responders and essential
backup to our brother agencies like the Shawnee Police Department and
the Pottawatomie County Sheriff's Department. Recently, CPN agreed to
operate Pottawatomie County's funding-challenged 911 call center and
assume all costs for not only the county but also the small towns in
the county, saving those entities $250,000 a year.
The Citizen Potawatomi Nation has worked diligently to cultivate a
tax base that can support its government functions. The tax collected
at CPN grocery stores, bowling center, ball fields and golf course are
all key components needed to achieve economic development on tribal
land. CPN spends 100 percent of every tax dollar on government services
such as roads, services for Native Americans and neighboring
communities, education, emergency response and job creation.
It has only been 40 years since the forced assimilation of Native
Americans began to be reversed with the signing of the Indian Self-
Determination and Education Assistance Act. The Citizen Potawatomi
Nation didn't enter into a self-governance compact with the Bureau of
Indian Affairs until 1999. Tribes are still reeling from the harmful
polices of the past and have only experienced success due to
extraordinary resilience and ingenuity. Unfortunately, that success is
sometimes seen as a threat by other government leaders, a reason some
tribes and local governments around the state still struggle to coexist
today.
Sub Chapter S Corporation
There is a critical need in Indian country for tribes to be given
the opportunity to enter into mutually beneficial partnerships with
their non-Indian neighbors for the economic development of their
geographic regions. To be successful, these partnerships need to have
the ability to take on corporate forms that are (a) familiar to non-
Indians, and (b) easy to administer. The Subchapter S corporate form is
ideal for this purpose. Non-Indians understand Subchapter S
corporations and are familiar with the rules for doing business with
Subchapter S corporations. Unfortunately, Indian tribes are uniquely
prohibited from participating in Subchapter S corporations. The IRS
will allow a city, or even General Motors, to participate in a
Subchapter S corporation, but not an Indian tribe. The federal statutes
authorizing the creation of Subchapter S corporations should be amended
to allow for such ownership.
Congressman Frank Lucas has introduced a bill which, if enacted,
will be the first step in creating a solution for this dilemma. Tribes
need access to the same corporate structures as other American
enterprises. In CPN's future case, the tribe will be able to make ``Sub
S elections'' for tribal corporations to do business in Oklahoma and
then domesticate them in Oklahoma under State law. The contracts these
corporations enter into will be subject to the authority of Oklahoma
law and the jurisdiction of Oklahoma Courts without tribal sovereign
immunity defenses. CPN will gain the benefit of limiting our liability
to the capital in the Sub S Corporation, and our contractual partners
and bank lenders will get the benefit of redress under state law. Both
parties gain by eliminating any doubt of the enforceability of a
contract with a tribal corporation doing business in Oklahoma.
Leasehold Mortgages on Trust Property
Another major obstacle to on-reservation lending is the trust
status of tribal lands. Lenders expect to be able to foreclose if a
borrower defaults; however, because trust land cannot be sold, lenders
can't foreclose on it in the event of default. Currently, if one builds
a building on trust land, no attorney will issue an opinion to a bank
that a leasehold mortgage can be perfected on buildings on Indian trust
land. The primary reason is that the trustee, the U.S. Department of
the Interior, will not assure lenders that leasehold mortgages on trust
lands are enforceable.
The use of leasehold mortgages is one solution to this problem. A
leasehold mortgage allows the lender to, in effect, become the tenant
on the land for a specified and tribally pre-approved period of time,
and to rent the land or the facility or business on the land to recover
money loaned to the tribe. In this way, the lender is protected, but,
at the end of the lease, the land remains in the hands of the owner.
Upon default of the mortgagor under a leasehold mortgage, the
lender will initiate enforcement action as defined in the recorded
leasehold Security Agreement and as certified by the Bureau of Indian
Affairs. In short, the lender will commence a leasehold mortgage
foreclosure in federal court or the court of jurisdiction by filing a
verified complaint. Said jurisdiction shall be specified in the
leasehold mortgage document and related indebtedness documents.
Borrowers and lenders shall both represent to each other and the
BIA that a leasehold mortgage is collateral and not debt service, and
then any lender taking over the operation of business under a leasehold
mortgage shall use standard care in running the business in order to
obtain a return of the money lent and a pre-approved rate of return on
the money. In this manner, the BIA can obtain a trustee's comfort level
that the underlying real property shall be returned to the borrowing
tribe in the same condition as when it was first encumbered, reasonable
wear and tear accepted.
If the Federal Government, as trustee of Indian lands, would
guarantee enforcement of leasehold mortgages on trust property for
commercial ventures in the same manner as it presently does for
housing, large amounts of capital could become available for economic
development in Indian Country without any additional financial burden
upon the Federal Government.
City of Shawnee Attempt to Collect Unwarranted Tax Revenue From CPN
With 100 percent of its tax revenue supporting the diversification
of the tribal economy and job creation, the Nation has spent more than
$40 million on infrastructure and public safety in the past decade.
Through management of federal funds and tribal sales tax revenue, CPN
slowly built up the infrastructure in the areas long-forgotten by
Shawnee city hall.
The Citizen Potawatomi Nation is not only providing services to
tribal governmental functions and enterprises, but also supports these
same services to communities throughout its jurisdiction. Such was the
case when CPN provided $625,000 for the resurfacing of the James W.
Allen Bridge in Shawnee, Okla. and gave $500,000 to widen Gordon Cooper
Drive from Benson Park Road to Bob Crouch Drive in Tecumseh.
This development and success finally drew attention of Shawnee's
leaders. In February 2014 CPN received a letter demanding that it act
as a tax collector for the City of Shawnee. The letter claimed that
city sales tax revenues were down due to tribal enterprises like
FireLake Discount Foods. Like many city claims, these assertions proved
hollow. Independent audits of its finances show that tax revenue has
increased each year since 1996, with the exception of the fiscal year
2009-2010.
On Sept. 10, CPN filed a detachment petition with the City of
Shawnee for tribal land held in trust by the federal government.
Shawnee City Clerk Phyllis Loftis denied the petition on the grounds
that CPN was not the legal owner of the property because of its status
as federal trust land.
In response, Asst. Secretary of Indian Affairs Kevin K. Washburn
wrote a letter to Citizen Potawatomi Nation affirming that ``Indian
tribes are the beneficial owners of land held for them in trust by the
United States. As such, tribes enjoy full and exclusive possession, use
and enjoyment of tribal lands. Further, tribal governments exercise
jurisdiction over trust lands and trusts lands are generally exempt
from jurisdiction of local and state governments, except where Congress
has specifically authorized jurisdiction.''
On Dec. 19, 2014 a judge ruled that city commission must grant
Citizen Potawatomi Nation a public hearing on its detachment request.
Although no one spoke against the detachment of CPN land, the
commissioners cast a 3-3 tie. Given that a majority is needed to affirm
such measures, the detachment petition failed.
The past year's tension has done little for either the city or the
tribe. Citizen Potawatomi Nation has attempted to play by the town's
rules in order to resolve the situation. At every turn the tribe's
efforts have been met with hostility. As it became clear to CPN nearly
one year ago, the tribe and its interests cannot receive a fair hearing
on any matter from certain elements of Shawnee's city government. In
requesting formal detachment of what is legally its own land, Citizen
Potawatomi Nation seeks to put an end to this senseless bickering. It
is time to move on and forward, separately, for our shared communities.
State of Oklahoma Attempt to Collect Unwarranted Revenue From CPN
Citizen Potawatomi Nation collects 8.5 percent sales tax on all
sales made on tribal trust land. The State of Oklahoma claims it also
has the authority to tax goods and services on Native American federal
trust land, including admissions to powwow, softballs games, golfing,
on-trust consumables and HEARTH Act lease activity.
In order force this double taxation, the State of Oklahoma has
initiated the process to revoke all sales tax permits, which are
necessary for liquor licenses, from all CPN enterprises. This action
would prohibit Citizen Potawatomi Nation from selling alcohol at any of
its enterprises, including gaming facilities, and is in violation of
the Model Gaming Compact.
The commerce clause of the U.S. Constitution implicitly states that
only U.S. Congress can regulate areas of commerce with Indian Tribes.
This sentiment was further supported by the HEARTH Act, which states
that HEARTH businesses are only applicable to Federal law and that
activities conducted under a lease of trust or restricted land that
occur on the leased premises are not taxable by States or localities,
regardless of who conducts the activities.
The U.S. Supreme Court also supports the right of Indian Tribes to
tax by recognizing that ``the power to tax is an essential attribute of
Indian sovereignty because it is a necessary instrument of self-
government and territorial management.'' Merrion v. Jicarilla Apache
Tribe, 455 U.S. 130, 137.
The State of Oklahoma must recognize these pre-emptions and allow
Indian Tribes to self-govern and create economic opportunities on trust
land.
Pottawatomie County Rural Water District 3
The Citizen Potawatomi Nation met with City officials at Shawnee
City Hall on February 27, 2009 in an effort to resolve the issues
preventing the Nation from obtaining the water and sewer services
necessary for economic development on the Nation's trust lands. The
Nation's offer to pay for the replacement of the sewer lift station was
rejected.
In March 2010 the Citizen Potawatomi Nation signed a contract with
an engineering firm to design a water, sewer and waste water treatment
facility to serve the Tribe's federal trust lands.
In May 2012, the City of Shawnee sued Pottawatomie Rural Water
District 3 and the Citizen Potawatomi Nation for providing tribal
housing, buildings and enterprises on Federal trust land with water.
Subsequently, the Oklahoma Department of Transportation has refused to
grant RWD 3 additional water line permits for ODOT rights-of-way.
Allowing the Shawnee Municipal Authority, or any other state or
municipality, to dictate who can provide water to a Native American
tribe on Federal trust land would create a veto power to tribal
economic development. That cannot be tolerated.
Contract Support Costs
CPN has been advocating for full funding of contract support costs
for nearly two decades. To that end, the Tribe supports a mandatory
appropriation for contract support costs because a mandatory
appropriation would remove CSC payments from the discretionary budget.
A mandatory appropriation is therefore an effective answer to the
dilemma posed by locating a legally binding obligation within an
appropriation structured to address discretionary service requirements.
The disastrous ramifications of that approach were all too visible when
in FY 2014 the Indian Health Service was compelled to redirect some
$125 million from program operations, including all of the funding
which Congress had intended would restore the prior year's sequester
reductions. A mandatory appropriation avoids such consequences for the
future, while assuring that Tribal contractors and compactors will be
paid in full for services duly rendered to the United States.
The Indian Employment, Training, and Related Services Demonstration Act
The 477 Initiative has been essential for the development of
effective and efficient tribal services to increase employment,
training, and related social services in Indian Country. With the
consolidation of funding streams, tribes have been using this
initiative to reduce administrative burden and increase services to the
most needy. This initiative has provided flexibility for tribes to
tailor activities into a single program to meet the unique needs of
their respective communities while still strictly adhering to the
Government Performance Results Acts accountability standards. The 477
Initiative has to date received the highest OMB PART rating of any
program in Indian Country.
The Citizen Potawatomi Nation's 477 Program has been in place since
1996. Over the past four years, CPN has served more than 6,000
participants through the 477 program. Of those who had employment as
their goal, 47 percent achieved unsubsidized employment. Average gain
per hour was in excess of $4.29.
The Citizen Potawatomi Nation is just one example where tribes
utilize the 477 Initiative to serve the hard-to-serve population in
high unemployment areas with great success. The 477 Tribes are able to
move tribal members from cash assistance programs to unsubsidized
employment and self-sufficiency. These successes are achieved in
accordance with their approved 477 Plan and accounted for in their
annual reports.
The 1992 Indian Employment, Training and Related Services
Demonstration Act provides a critical foundation for our tribe in
helping get our members, and members of other federally recognized
tribes, trained and ready to join America's diverse workforce.
Specifically, it allows tribes like the Citizen Potawatomi Nation to
tailor activities into a single program that meets our specific
community's needs. It also reduces administrative redundancies while
keeping us in compliance with government accountability standards.
Proving what an excellent program it is, the 477 Initiative received
the highest OMB PART rating of any in Indian Country.
The 477 tribes across this country agree with Senator Lisa
Murkowski and Senator Mark Begich in pushing Congress to amend the
original law in order for the law to reach its full potential. We ask
that Congress reaffirm its intent to adhere to the original spirit of
the law, and allow tribes to:
Continue to receive funds through contracts and amendments
in line with the Indian Self-Determination Act
Not require tribes to maintain separate records
Combine and integrate federal funds to achieve the goals set
forth in the original law.
Allocate funds directly to support economic development and
create jobs.
Expand the scope of the original project by including
competitive, formula, block grant and designated funds for use
by employment and training programs.
Expand employment, training and related socials service
programs currently used from other federal agencies.
Address the timely approval of 477 Plans, regulation waivers
and dispute resolution so there are clear rules when
disagreements arise about the interpretation of the 477 Act.
Insert provisions allowing a tribe to utilize their
negotiated indirect cost rate, rather than applying separate
administrative caps to each funding source if a tribe should so
choose.
Tribal Self-Governance Legislation: Title IV Amendments
Shortly after Title IV of the Indian Self-Determination Act was
enacted, the DOI's regulations failed to fully implement Congress's
intent. In 2000, Title V was enacted, which created a permanent Self-
Governance program within HHS, and which directly addressed many of the
issues that proved to be problematic during the DOI's Title IV
rulemaking process.
Today, many of the improvements and tribal authority reflected in
Title V remain absent from Title IV. Title IV amendments have been the
top legislative priority for the 261 Self-Governance Tribes in the DOI
for more than 15 years (this was recently reaffirmed at the 2015 Self-
Governance Strategy Session in Washington, DC, January 27, 2015).
Therefore, we fully support S. 286, which would amend Title IV of the
ISDEAA to ensure consistency and efficiency among Self-Governance.
The key issues addressed by S. 286 are as follows:
Streamline the administrative responsibilities for Self-
Governance Tribes with provisions in Title V, the IHS Self-
Governance authority;
Establish a clear ``final offer'' process and timelines for
situations when DOI and the Tribe are unable to agree on
particular terms of a compact or funding agreement, or when DOI
delays approval unreasonably;
Clarify and limit the reasons for which DOI may decline to
enter a proposed agreement;
Protect Tribes from DOI attempts to impose unauthorized
terms in compacts or funding agreements;
Provide a clear avenue of appeal and burden of proof for
Tribes to challenge adverse agency decisions;
Clarify Tribal and federal oversight roles in construction
to ensure fiscal prudence and public safety;
Leave unchanged the discretionary authority to compact non-
BIA programs within DOI; and
Make important amendments to the self-determination
contracting law, such as clarifying reporting requirements,
rules of interpretation, and applicability of certain Title I
provisions to Title IV agreements.
Conclusion
Collectively, tribal businesses and governments are the largest
employers in the State of Oklahoma, accounting for more than 50,000
jobs. Analysis by the Steven C. Agee Economic Research & Policy
Institute at Oklahoma City University estimated that the total tribal
impact on the state was more than $10 billion in 2012.
In addition to jobs, tribal governments help ease the burden of
services on the state, providing funding for education, health and
safety and contributing to non-profit and community organizations. More
than 50,000 families benefited from healthcare, meals and educational
opportunities provided by CPN in 2013.
While there are genuine differences to work out in tribal-state and
tribal-city relations, it is important to remember that as neighbors,
we are all in this together. The work and investments of the Citizen
Potawatomi Nation and other tribal governments should not be seen as
threats to those at the state capitol or city hall of any municipality
in Oklahoma. For the good of our shared communities, these unique
partnerships should be embraced.
______
Prepared Statement of Michael G. Anderson, Executive Director, Native
American Contractors Association
Introduction
The Native American Contractors Association (NACA) is pleased to
submit testimony for the hearing ``Advancing Economic Success in Indian
Country.'' This hearing fits squarely in line with the vision of NACA.
NACA is a national association of businesses owned by tribes, Alaska
Native Corporations (ANCs), and Native Hawaiian Organizations (NHOs)
that utilize small business contracting programs to further economic
development in their communities. NACA's vision is ``To advance the
economic self-sufficiency of America's Indigenous Peoples.'' Small
business federal contracting programs, such as the Small Business
Administration's (SBA) 8(a) Business Development Program are critical
to advancing economic development in Indian Country. The Senate
Committee on Indian Affairs (Committee) should continue to support, and
enhance, such programs.
Background
The first rule of advancing economic development in Indian Country
should be similar to that of medicine: first, do no harm. When Congress
empowers Native communities with programs that work to meet the needs
of those communities, those programs should be enhanced and protected.
Additional programs are needed, but much can be done simply by
protecting and enhancing existing programs. This includes Indian gaming
and Native contracting programs.
Native contracting programs are a valuable tool for both businesses
owned by individual American Indians, Native Hawaiians, or Alaska
Natives, and also for businesses owned by tribes, ANCs, and NHOs. Many
communities are located in remote locations and lack a commercial
market to support different types of economic ventures. Federal
contractors are able to ``go where the work is'' and thus are not
constrained geographically. This may include performing contracts in
places like nearby military installations. It can also mean working in
nearby states, or even in Washington, DC, the heart of the federal
government. The SBA's 8(a) program in particular provides resources and
opportunities for Native firms. However, the program needed unique
regulations and statutory authority to meet the specific needs and
structures present in Indian Country. These are needs and structures
that do not exist in the same manner as an individually-owned company
may experience. Many of the specific rules governing community-owned
entities in the program are the result of recommendations made from the
Reagan Commission on Reservation Economies. Select passages of the
report have been attached to this testimony to highlight the need and
beginning of these unique provisions of the program.
The revenue earned from these firms flows back to the Native
community. Tribal leaders or the Board of Directors determines the best
way to reinvest this revenue back into the community. For example,
according to the report ``The Economic, Social & Cultural Impacts of
the Native 8(a) Program'' commissioned by NACA in 2008 cites that more
than $1 11 million in benefits flowed to Native communities from the
8(a) program while impacting more than 109,000 jobs across the country.
The impact of the program reaches far beyond the beneficiaries of the
profits derived from the 8(a) program.
Advancing the Needs of the SBA 8(a) Program in Indian Country
NACA is making several recommendations for the Committee to
consider as part of its work to strengthen economic development in
Indian Country. These recommendations are based on policy priorities
adopted by NACA's Board of Directors.
Parity for Tribes, ANCs, NHOs
Congress should enact legislation to establish parity for tribes
and NHOs in the 8(a) program. The Alaska Native Claims Settlement Act
(ANCSA) provides that ANCs shall be considered economically
disadvantaged for purposes of federal programs. Since this legislation
only impacts Alaska Native communities, neither tribes, nor NHOs
currently enjoy the same presumption via federal statute. The SBA has
created regulatory direction that tribes must only prove their status
one time and subsequent firms need not prove their economic
disadvantage for certification. NHOs have yet another authority, and
must overcome burdensome reviews of their organizations to maintain
their economic disadvantage status every year. Congress should empower
tribes and NHOs by providing the same statutory presumption of economic
disadvantage.
Native American Set-Aside
The Federal Government must currently set aside 23 percent of its
federal procurement dollars for small businesses. There are subsequent
set-aside programs under this umbrella, such as socially disadvantaged
businesses, HUBZone, woman-owned small businesses, Service Disabled
Veteran-Owned Small Businesses, etc. Native contractors can be
certified under these different programs, each of which has a specific
goal associated with the program. However, there is not a single
``Native American'' set-aside program.
There is a suite of programs that facilitate Native contracting.
The 8(a) program has unique rules for tribes, ANCs, and NHOs but the
term ``Native 8(a)'' is colloquial to describe these provisions, as
there is not a specific set-aside for such entities. Tribes also can
participate in Historically Underutilized Business Zones (HUBzone), as
all reservations are considered to be part of HUBzones.
There is also the Buy Indian Act and the Indian Incentive program.
However, each of these programs are limited in scope. The Buy Indian
Act only applies to the Bureau of Indian Affairs (BIA) and the Indian
Health Service (IHS). Similarly, the Department of Defense (DOD) is the
only agency for which Congress provides funding for the Indian
Incentive Program. Each of these programs contains further
shortcomings. For example, other agencies or bureaus outside or even
within the Department of the Interior (DOI) that directly touch Native
Americans are not required to set-aside contracts for Native firms. The
Office of Special Trustee, for example, is not required to use the Buy
Indian set-aside, despite its mission being tied directly to Native
Americans. Funding for the Indian Incentive Program is $15 million each
year. While this generates substantial subcontracting revenue for
Native subcontractors, there is a growing backlog of claims for
incentive payments to prime contractors utilizing the program. Lengthy
delays, uncertain appropriations and the growing backlog create
disincentives for prime contractors to maintain relationships with
Native subcontractors.
While there are several programs that are available to Native
contractors, they do not fit well together, nor are they designed for
maximum use by Native firms. They represent a disjointed approach to
address economic development through federal contracting. These past
efforts should be commended, but the time has come for a comprehensive
program. Congress should enact legislation that creates a specific set-
aside, providing specific focus to advance economic development in
Indian Country. This could be done under the government-to-government
relationship, which provides a unique legal basis for such a program.
Creating a Native American set-aside would facilitate more economic
opportunities for Native firms.
Conclusion
I appreciate the opportunity to submit written testimony. NACA's
members play a key role to advance the economic interests of Indian
Country. As the Committee works on legislation to this end, NACA urges
the Committee to facilitate and enhance Native contracting programs,
and look to the future by establishing a Native American set-aside
program. We look forward to being a partner with you in this endeavor.
______
Prepared Statement of Hon. Terri Parton, President, Wichita and
Affiliated Tribes
Dear Senator Lankford:
My name is Terri Parton and I am the President of the Wichita and
Affiliated Tribes. I thank you for this opportunity to provide written
testimony on behalf of the Wichita and Affiliated Tribes. I applaud the
efforts that have been made during this administration to advance
economic development, selfgovernance and self-determination. However,
while many tribes across the country and on the other side of Oklahoma
see many of the benefits of the great things that this administration
is doing to promote economic development, self-governance and self-
determination, the tribes in the southwest part of Oklahoma have not
been able to fully take advantage of these opportunities due to our
unique land situations and the inability to get the needed legal
infrastructure in place to move forward. Our tribes on this side of the
state have struggled for many years. A lot of the issues revolve around
the inability for our tribes to successfully succeed at economic
development to provide for our people. This inability leads to internal
tribal tunnoil which hinders the economic future for our tribes here.
I would like to thank you for having the Oversight Field Hearing on
``Advancing Economic Success in Indian Country.'' While we appreciate
the hearing there were some views that were expressed by the panel that
we don't necessarily agree with. Some of those issues are addressed in
this testimony. Below are some successes, struggles and barriers that
we face.
History
The Wichita and Affiliated Tribes is the only tribe that claims
Oklahoma as its aboriginal homeland. We were always here. Our people
once roamed from the area around Wichita, Kansas, Oklahoma and all the
way down to around Waco, Texas. While we used to inhabit these lands
freely, in the late 1800s we were forced to move to this reservation
area that we now share with the Caddo and Delaware Tribes. Jointly we
have over 2,500 acres of land. The Wichita and Affiliated Tribes does
have a constitution and our governing document is a Governing
Resolution. We have a tribal council that is made up seven elected
officials who are authorized to transact business on behalf of the
Tribe.
Economic Successes
The Wichita and Affiliated Tribes has enjoyed some limited economic
success over the years. The limited success that we have achieved had
many hurdles that continue today as we continue to diversify our tribal
economy.
8a Companies
In 2003, the Wichita and Affiliated Tribes became 51 percent owner
of Anadarko Industries. Anadarko Industries is an 8(a) company that is
located in Houston, Texas. Anadarko has seen much success and graduated
from the 8(a) program in 2012.
In 2011, the Wichita and Affiliated Tribes became 51 percent owner
of Wichita Tribal Enterprises which was a duplication of Anadarko
Industries. Wichita Tribal Enterprises has faced many hurdles. In 2015,
the Tribe under the Wichita Tribe Industrial Development Commission
purchased the remaining 49 percent ownership in the company and now is
the 100 percent owner.
Sugar Creek Casino
In 2008, the Wichita and Affiliated Tribes opened the Sugar Creek
Casino in Hinton, Oklahoma.
Wichita Tribal Smoke Shop
In 2008, the Wichita and Affiliated Tribes opened the Wichita
Tribal Smoke Shop in Hinton, Oklahoma.
Wichita Travel Plaza
In 2013, the Wichita and Affiliated Tribes opened the Wichita
Travel Plaza in Anadarko, Oklahoma.
In addition, the Wichita and Affiliated Tribes has a Wichita
Housing Authority, Wichita Tribe Industrial Development Commission,
Wichita Tax Commission, Wichita Gaming Commission and Wichita Tribe
Sports Commission. We also recently purchased a hotel.
Economic Struggles and Barriers and Challenges
WCD Lands-Land Exchange and Consolidation
WCD stands for the Wichita, Caddo and Delaware Tribes. While we
read many great stories about tribes all over the United States and the
Department of Interior consolidating and restoring land back to tribes,
we wonder why this cannot be done for our Tribe, the Delaware Nation
and the Caddo Nation. Thousands of acres of our aboriginal homelands
taken during allotment were later returned to joint trust ownership
among three separate tribes. These lands are virtually useless to us
without agreement among each of the three tribes and approval of Mt
United States. In 2007, the Tribes agreed to exchange some of the trust
lands among themselves so that each would have individual control of
some acreage. The tribes have resolutions approved to set-aside land
for each tribe. We have tried continuously since 2007 to consolidate
600 of the jointly shared lands into parcels for each tribe so each
tribe would have lands to exercise jurisdiction, exercise self-
governance, exercise selfdetermination and pursue economic development.
We spend all of our resources on attorney fees because we can't get a
decision out of our Regional Office. We truly believe that the
Secretary has the authority to approve this land exchange that benefits
all three tribes. Yet, for over eight years since the resolutions were
passed and with the emphasis on trust acquisitions and land
consolidation in other parts of the Country, we still sit here hoping
that one day we will enjoy the benefits that other tribes have who
don't have to worry about jurisdictional issues because they share
lands.
WCD-Lease With the Regional Office
WCD Enterprises, Inc. has had a lease that has expired that the
Southern Plains Regional Office leases that we have been unable to get
a new lease with. The lease expired many years ago and then there were
one year renewals made. We would like to get the lease issue resolved.
It is part of our economic development. The lease has remained at the
same rate while costs have gone up to maintain it.
Land Acquisitions
We read many great stories about tribes all over the United States
and even other areas in Oklahoma approving their land into trust
applications. However, we find here that it is very difficult to
acquire land into trust, particularly for direct service tribes in the
Southern Plains Region. Processes that should take a few weeks,
regularly take years to accomplish. Trust applications are often deemed
incomplete or removed from consideration based upon the errors or ever
changing requirements of BIA personnel. It seems that where the effort
in other areas of the Country is to find ways to streamline the
approval process, the effort here is to delay the approval process.
HEARTH Act
We were pleased to be one of the first Tribes to obtain federal
approval of a tribal leasing ordinance and appreciate your assistance.
However, if we are unable to acquire and govern our own trust lands
exclusively, and develop the corporate infrastructure to manage them, I
am afraid the tribal leasing ordinance will be of little use to us.
That should not be the case. We urge you to focus manpower here in
Western Oklahoma to resolving these issues immediately so that we and
our neighbor tribes can enjoy the same exciting new opportunities that
those elsewhere enjoy.
Federal Charter
In December of 2012, the Wichita and Affiliated Tribes submitted a
Federal Charter. Contrary to the current goals and priorities to
improve and enhance economic development in Indian country, the BIA has
refused to approve our federal charter. The BIA insists we must hold a
secretarial election, even though the law does pennits all tribes to
adopt a charter the way we have, and even though the BIA has permitted
our neighboring tribes to do so. We urge you to find out why tribes
cannot get Federal Charters approved in this area.
Thank you again for allowing the Wichita and Affiliated Tribes to
submit written testimony.
______
Prepared Statement of James K. Byrd, Member, Muscogee (Creek) Nation
Senator Lankford
Thank you for the opportunity to provide comment on ``Advancing
Economic Success in Indian Country.'' I am pleased that this Committee
is elevating the issue of economic success in Indian Country.
Clearly, elements for success were revealed in the live testimony
by the witnesses that testified at Anadarko High School. Success can be
enhanced by using programs from government entities such as the Small
Business Administration and using the expertise of local technical
institutes. Individual desire is also imperative in order to capitalize
on economic opportunity which presents itself in a myriad of ways.
Business preparation is essential but it is business opportunity
that is of more value. It is in this light that I submit my comment.
Leases on federal lands, both on-shore and off-shore, for mineral
exploration, recovery, transport and distribution that are administered
by the Federal Government, i.e. the Bureau of Land Management (BLM),
should contain a utilization clause exclusive to Indian business. The
clause should direct the leasee to utilize Indian businesses to the
maximum extent possible. This clause should be similar to the small
business utilization clause in government contracts. The leasee should
be required to develop an Indian business utilization plan. In
addition, the leasee should be required to report the utilization rate
of Indian business to the BLM. In turn, the BLM can use this data for
enforcement of the clause.
The mineral resources of this country have much value. Indian
businesses have successfully participated in this industry, but are not
widely entrenched in this vast market. This business opportunity has
great promise for advancing economic success in Indian Country. As the
Federal Government receives large lease payments and mineral royalties,
so to can Indian businesses flourish from the opportunity to
participate in these federally controlled endeavors. This approach is
not designed to control the mineral exploration industry, but to
enlighten them on the need to be inclusive of the original mineral
owners of this great country.
______
Prepared Statement of George P. Tiger, Principal Chief, Muscogee
(Creek) Nation
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
______
Joint Prepared Statement of Kay Bills, Osage; Pamela Standing,
Cherokee; and Kristi Daniels-Long, Coeur d' Alene
Chairman Lankford, thank you for hosting the first field hearing on
achieving economic success in Indian Country. That is an innovation in
itself.
As individual entrepreneurial business owners, we are often
overlooked by federal committees that focuses exclusively on tribes,
which we agree is a government-to-government relationship and certainly
appropriate. However, we believe that a critical and core element of
achieving economic success will depend on building, not just tribal
businesses, but strong American Indian & Alaska Native entrepreneurs at
the same time.
This white paper is a result of a growing coalition of American
Indian & Alaska Native businesses, higher education, and professional
organizations working together to see the long delayed implementation
of the Buy Indian Act of 1910. We have traveled to Minnesota and New
Mexico. We have presenting our information in Oklahoma. This work is a
compilation of many activities over the past two years.
We believe the Bureau of Indian Affairs and the Indian Heath
Service are aligned much like the United States Department of Veterans
Affairs. The model for delivery of service to American Indian & Alaska
Native, like the model for our Nations Veterans, is in distress. The
past and future investment by the government to our communities must be
maximized. We feel that to sustain any progress in the face of
constrained budget an examination from top to bottom of the procurement
practices of these two agencies is critical.
We share your concerns about federal budgets and believe that
empowering American Indian & Alaska Native companies to participate in
delivery of goods and services to our own communities is a positive
step. Like our Veterans, American Indian & Alaska Native businesses,
tribal or individual, know best how to serve our tribal members.
We submit 7 Steps to Transparency, Accountability & Economic Parity
for your consideration. *
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* The information referred to has been retained in Committee files
and can be found at http://www.ncai.org/MSP-15-008_Rec_and_Reso.pdf
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______
Prepared Statement of James Ray, Project Director, MBDA Business
Center--Tulsa, Native American and Alaska Native Program
Economic development on trust land is problematic for investors and
lenders because of sovereign immunity issues and court jurisdiction
that sometimes has proven to get complicated. Tribes that have U.C.C.
regulations in place would be candidates for an expanded guarantee
program that would ensure that the investment was protected beyond the
collateral of the real estate. Tribes with U.C.C. and the ability to
lease could attract projects to land either in trust or owned fee
simple with the added step of a loan guarantee pool enhanced through
re-insurance to mitigate potential losses. Underwriting for such
projects would need to be open to adequate due diligence, but would
create an attractive model for Foreign Direct Investment and Domestic
Direct Investment in Indian Country. This could alleviate issues that
might prevent New Market Tax Credit investors to get involved in a
project as well.
This concept could be utilized with adequate fees derived from the
project to administer and create a ``no cost to the government'' model.
The current BIA Loan Guarantee could be authorized for a larger
allocation to enhance opportunities for tribes to develop opportunities
not previously covered. The amount of authorization should be at least
1 billion dollars as opposed to the current 100 million dollar level.
If the United States holds the land in trust for the tribes, then they
can only remove barriers and lay the ground work for ensuring the
highest and best use with the greatest benefit to the tribe and the
community members of the tribe.
Some level of fast tract for regulations would need to be
implemented to avoid excessive delays.
There are 56,000,000 acres of land held in trust and fee simple by
tribes in the United States.
A portion of the incentive to locate projects in Indian Country
would be to fund the guarantee from the tribe. The resulting jobs and
economic activity could make the investment from the tribal perspective
attractive.
Future federal settlements to tribes could very easily include a
provision to further investment opportunities in Indian Country by
providing funds to self-insure economic development projects that
create good jobs and further wealth creation for tribal members.
The concept would be similar to Private Mortgage Insurance. In this
case maybe Private Lender Insurance. The guarantee could be shared
between government and re-insurance with premiums being collected by
both.
Other Opportunities to Alleviate Barriers From the Federal Agencies
Define and streamline the process to put land in trust for
tribes.
Define and develop ``highest and best use'' parameters to
ensure that trust land is allowed to be developed by a tribe
with minimum restriction.
Institute SBA advocates for new 8(a) firms to ensure that
they don't burn through 1-2 years of eligibility with minimal
or no results. Strong training up front with maximum exposure
and advocacy from BDS and PCR. Estimates have been put forth
that as much as 85 percent of 8(a) firms never get a contract
during their 9 year program.
Tie performance ratings and associate bonuses and raises and
promotion in the contracting community to meeting goals set
forth in the Small Business Act. Institute accountability that
is simple and measurable.
[all]