[Senate Hearing 116-16]
[From the U.S. Government Publishing Office]
S. Hrg. 116-16
BUILDING OUT INDIAN COUNTRY: TOOLS FOR COMMUNITY DEVELOPMENT
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HEARING
before the
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
APRIL 10, 2019
__________
Printed for the use of the Committee on Indian Affairs
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
U.S. GOVERNMENT PUBLISHING OFFICE
36-244 PDF WASHINGTON : 2019
COMMITTEE ON INDIAN AFFAIRS
JOHN HOEVEN, North Dakota, Chairman
TOM UDALL, New Mexico, Vice Chairman
JOHN BARRASSO, Wyoming MARIA CANTWELL, Washington
LISA MURKOWSKI, Alaska JON TESTER, Montana,
JAMES LANKFORD, Oklahoma BRIAN SCHATZ, Hawaii
STEVE DAINES, Montana CATHERINE CORTEZ MASTO, Nevada
MARTHA McSALLY, Arizona TINA SMITH, Minnesota
JERRY MORAN, Kansas
T. Michael Andrews, Majority Staff Director and Chief Counsel
Jennifer Romero, Minority Staff Director and Chief Counsel
C O N T E N T S
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Page
Hearing held on April 10, 2019................................... 1
Statement of Senator Cortez Masto................................ 32
Statement of Senator Daines...................................... 33
Statement of Senator Hoeven...................................... 1
Statement of Senator Murkowski................................... 37
Statement of Senator Smith....................................... 3
Statement of Senator Udall....................................... 2
Witnesses
Childs II, Henry, National Director, Minority Business
Development Agency, U.S. Department of Commerce................ 15
Prepared statement........................................... 16
Harris, Jodie, Director, Community Development Financial
Institutions Fund, U.S. Department of the Treasury............. 10
Prepared statement........................................... 11
Ponti-Lazaruk, Jacqueline, Chief Innovation Officer, Rural
Development, U.S. Department of Agriculture.................... 20
Prepared statement........................................... 22
Sweeney, Hon. Tara Mac Lean, Assistant Secretary, Indian Affairs,
U.S. Department of the Interior................................ 4
Prepared statement........................................... 6
Thompson, Hon. Mark, Lieutenant Governor, Acoma Pueblo; Board
Member, Indian Pueblo Cultural Center.......................... 26
Prepared statement........................................... 27
Appendix
Ahuja, Kiran, CEO, Philanthropy Northwest, prepared statement.... 45
United South and Eastern Tribes Sovereignty Protection Fund USET,
prepared statement............................................. 50
BUILDING OUT INDIAN COUNTRY: TOOLS FOR COMMUNITY DEVELOPMENT
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WEDNESDAY, APRIL 10, 2019
U.S. Senate,
Committee on Indian Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 2:30 p.m. in room
628, Dirksen Senate Office Building, Hon. John Hoeven,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JOHN HOEVEN,
U.S. SENATOR FROM NORTH DAKOTA
The Chairman. Good afternoon.
I call this oversight hearing on Building Out Indian
Country: Tools for Community Development to order.
Today, we will hear from Federal agencies and tribal
leaders on how Federal financing tools, such as loans, grants
and technical assistance, are being deployed in tribal
communities.
Since 2006, this Committee has held eight hearings on
economic and community development in Indian Country. Testimony
in prior Committee hearings, information from tribal leaders
and literature all reveal significant challenges facing Indian
tribes and individual business owners.
A survey of business owners conducted by the Census Bureau
found that nearly two-thirds of Native American businesses were
started with the use of either personal and family savings or
credit cards. This demonstrates the lack of access to
traditional investment sources such as bank loans.
In addition to the lack of access for start-up capital,
some of the most notable challenges are lack of interest from
lenders and secondary markets, greater need for credit
subsidies, and a lack of business education in tribal
communities. Traditional models of financing do not always work
in rural communities. This is especially true on tribal lands
where land title issues, as well as the difficulty in
collateralizing tribal assets, make investors wary of working
with tribes.
Local community banks and community development financial
institutions can fulfill those investment needs. For instance,
in my home State of North Dakota, there are five community
development financial institutions that since 1996 have been
awarded nearly $6.1 million from the CDFI Fund at the Treasury
Department.
Also, building credit and developing human capital affects
the ability of tribal businesses to begin and maintain
operations. According to the Bureau of Labor statistics, the
current unemployment rate for Native Americans is 7.8 percent.
Since the Bureau began keeping this data in 2000, the all-
time lowest percentage of unemployment for Native Americans was
7.5 percent. That means at this point, we are near some of the
lowest unemployment statistics for Native Americans. However,
this rate is still more than double the national rate of 3.8
percent.
As the present Administration continues to promote policies
such as regulatory reform, it is important that these positive
impacts are felt in Indian Country. That is why on January 24,
2019, I reintroduced the Indian Community Economic Enhancement
Act of 2019. The ICEE Act, Senate Bill 212, aims to address the
disparity in economic opportunities that tribal businesses and
Native entrepreneurs face by amending existing law to increase
access to capital, attract businesses to Indian communities,
and lessen the cost of economic development by reducing Federal
bureaucracy.
The ICEE Act amends the Native American Business
Development Trade Promotion and Tourism Act of 2000 to require
coordination between the Secretaries of Commerce, Interior and
Treasury to develop initiatives and encourage investment in
Indian communities. It also elevates the Director of Indian
Programs in the Department of Commerce and permanently waives
the requirement for Native CDFIs to provide a matching cost
share for assistance received by the Treasury CDFI.
The Committee favorably reported the bill on January 29,
2019. I look forward to seeing the legislation enacted into
law.
Community and economic development are essential to the
long term health and stability of our Native communities. It is
why this Committee has frequently held hearings on the subject
and why we return to it today.
With that, I will now turn to Vice Chairman Udall for his
opening statement.
STATEMENT OF HON. TOM UDALL,
U.S. SENATOR FROM NEW MEXICO
Senator Udall. Thank you, Chairman Hoeven. Thank you for
calling today's hearing.
Before I begin, Senator Tina Smith has told me that she has
constituents here. I understand they are Close Up students with
their teacher from Red Lake Indian Reservation near Red Lake,
Minnesota. Welcome to all of you. I know you will find this an
interesting hearing.
Enhancing economic development opportunities in Indian
Country is critically important, whether it is access to
financial capital or infrastructure such as housing, water and
sewer systems, roads and bridges. It is no secret that Native
communities face ongoing and often unique challenges when it
comes to growing business development opportunities. The
agencies represented here today, DOI and USDA, Commerce and
Treasury, all have programs aimed at easing these challenges
for tribes and Native business owners.
However, having these programs on the books is not enough.
Federal agencies must ensure that tribes are actually getting
the resources they need and the technical assistance they
deserve to use the programs effectively. In short, Federal
agencies must take an all-hands-on-deck approach to supporting
economic development in Indian Country so that economic
development efforts are coordinated and complimentary.
A key factor to attracting and sustaining businesses in
Indian Country is marketing its healthy workforce as a way to
support the next generation of Native American innovators. My
bill, the Native American Business Incubators Program Act,
promotes investor confidence while also filling a critical gap
for Native entrepreneurs, who not only need access to work
space and opportunities to build professional networks, but
also access to community expertise, particularly as it applies
to doing business on trust lands.
This bill would complement existing Federal programs to
better support entrepreneurship in Indian Country. I am hopeful
it will become law this Congress.
Instead of supporting programs that target tribal economic
growth, the President's budget for fiscal year 2020 proposed
drastic cuts or outright elimination of many of the successful
initiatives we will be discussing today, like the Indian Loan
Guarantee Program.
The Loan Guarantee Program has long been essential to the
success of Native borrowers, including Picuris Pueblo which
used the program to build the Hotel Santa Fe and the Indian
Pueblo Cultural Center which Lieutenant Governor Thompson will
describe used the program to build a convenience store, a
coffee shop and a world class museum that educates visitors
about the history and culture of New Mexico's Pueblos.
Since its inception, the program has distributed $1.6
billion across Indian Country. In New Mexico's specifically, it
has helped spur tribal business enterprises worth tens of
millions of dollars. Despite these and many other success
stories, the President has proposed eliminating this loan
guarantee program.
I am looking forward to hearing from today's witnesses,
especially Mark Thompson, the Lieutenant Governor of Acoma
Pueblo and board member of the Indian Pueblo Cultural Center in
Albuquerque on this topic and more. Thank you, Lieutenant
Governor, for joining us today.
I would also like to welcome Assistant Secretary Tara
Sweeney to her first hearing since being confirmed. As Indian
Country's lead advocate in the Administration, I hope we will
be seeing more of you in the coming months. Welcome, Tara.
I hope you and the other folks here from the Administration
will offer some insights into how we can improve Federal
community development efforts in Indian Country.
Thank you, Mr. Chairman.
The Chairman. Thank you, Vice Chairman.
I would ask, Senator Smith, do you have any opening
statement, you would like to make?
STATEMENT OF HON. TINA SMITH,
U.S. SENATOR FROM MINNESOTA
Senator Smith. Thank you, Mr. Chairman.
I would just like to add my welcome to the students from
Red Lake. It is wonderful to have you all here. Thank you for
coming to my coffee this morning. I think it is the second time
in one day we have had a chance to see each other. Thanks so
much for being here.
The Chairman. With that, we will turn to our witnesses.
Our witnesses today are the Honorable Tara Mac Lean
Sweeney, Assistant Secretary, Indian Affairs, U.S. Department
of the Interior, Washington, D.C.; Ms. Jodie Harris, Director,
Community Development Financial Institutions Fund, U.S.
Department of the Treasury; Mr. Henry Childs, II, National
Director, Minority Business Development Agency, U.S. Department
of Commerce, Washington, D.C.; Jacqueline Ponti-Lazaruk, Chief
Innovation Officer, Rural Development, U.S. Department of
Agriculture, Washington, D.C.; and the Honorable Mark Thompson,
Lieutenant Governor, Acoma Pueblo and Board Member, Indian
Pueblo Cultural Center, Albuquerque, New Mexico. Welcome.
For our first three witnesses, Interior, Commerce and
Treasury, our Rule 4(b) states witnesses must state on the
record why your testimony is late. It is supposed to be in 48
hour prior. My staff has asked that I ask you to state on the
record why your testimony was late as part of your introductory
remarks.
With that, we will begin with Ms. Sweeney.
STATEMENT OF HON. TARA MAC LEAN SWEENEY, ASSISTANT SECRETARY,
INDIAN AFFAIRS, U.S. DEPARTMENT OF
THE INTERIOR
Ms. Sweeney. Chairman Hoeven, Vice Chairman Udall, and
members of the Committee, my name is Tara Mac Lean Sweeney and
I am the Assistant Secretary of Indian Affairs at the U.S.
Department of the Interior.
Thank you for the opportunity to testify. My testimony
today will provide a high level overview of my written
comments.
My service began in July 2018 and since that time, I have
focused on three critical components to move the economic
needle in and for Indian Country first, by analyzing the
current state of operations within Indian Affairs and executing
administrative adjustments and solutions to improve service
delivery to Indian Country.
It is the responsibility of Indian Affairs to deliver
efficient and effective services to Indian Country as we
continue to work to meet our trust responsibilities and treaty
obligations. Second is walking into the wind to face the social
challenges in our communities and specifically, building a
strategy to address our Native American focused cold cases of
violent crimes and missing and murdered American Indian and
Alaska Native women and children.
I proudly stand with our law enforcement and social
services employees working to provide them with the tools
necessary to battle at all levels on behalf of our people.
Healthy communities attract outside investment and local
reinvestment which is one reason why school and public safety
guide decisions made by my hallway.
The third component is to take a proactive approach to
building an economic road map for development and growth in
Indian Country. This must be done in partnership with our
tribal leadership, tribal enterprises, Alaska Native
corporations, Native-owned financial institutions, the
financial sector, our Federal partners, and Congress.
Indian Affairs is poised to develop a robust pathway for
stakeholders interested in investing in our Native communities.
There are strong examples of the steps that Indian Affairs has
taken and is about to embark on. I would like to share them
with the Committee today.
We provide direct and indirect support for economic growth
in Indian Country. Our focus includes the development of energy
and mineral resources, increasing access to capital, assisting
business development, and encouraging development of
transactional capacity in tribal communities.
Indian Country directly benefits from the Administration's
Energy Security Initiative. Energy royalties paid last year to
Indian tribes and allottees totaled over $1 billion. Energy
production in Indian Country as a source of revenue is now
second only to gaming.
Indian Affairs provides technical assistance on 37 gas and
oil projects, 83 renewable energy projects and 61 mineral
projects. Mr. Chairman, your bill, S. 245, streamlines the
approval of tribal energy resource agreements thereby
encouraging tribal self determination in the development of
energy on Indian trust lands without unnecessary Federal
oversight.
Indian Country has expressed an interest in opportunity
zones. An opportunity zone is an economically distressed
community where new investments, under certain conditions, may
be eligible for preferential tax treatment.
Tribes deserve equal footing and access to opportunity
zones. I am committed to working with the Committee, the
Treasury, and tribal leaders to ensure appropriate measures are
taken to ensure that tribes have the opportunity to develop
their local economies and investors have the opportunity to
choose Indian Country for their portfolios.
Our Native American Business Development Institute grants
are a vehicle for tribes and tribal businesses to take
advantage of opportunity zones. For the fiscal year 2019 grant
cycle, we have created an opportunity zone preference for
tribal applicants.
Finally, most tribes lack commercial codes to secure
collateral and assure access to credit. Without these codes and
an accurate, accessible system for filing claims, creditors may
increase borrowing costs to offset the risks or refuse to lend
altogether. We are helping tribes develop the legal
infrastructure that is critical to economic progress.
I want to conclude by recognizing that small businesses are
the life blood of community development. They are necessary to
achieve the multiplier effect in Indian Country where a dollar
turns over six or seven times among community members before it
leaves the local economy.
I want to drive our efforts to foster healthy economic
environments in Indian Country to support small business. I am
committed to empowering our tribal governments, communities and
Native enterprises to develop sustainable economies. I look
forward to working with this Committee, members of Congress and
the Administration to accomplish these goals.
Thank you.
[The prepared statement of Ms. Sweeney follows:]
Prepared Statement of Hon. Tara Mac Lean Sweeney, Assistant Secretary,
Indian Affairs, U.S. Department of the Interior
Chairman Hoeven, Vice-Chairman Udall, and Members of the Committee,
my name is Tara Mac Lean Sweeney and I am the Assistant Secretary of
Indian Affairs at the U.S. Department of the Interior (Department).
Thank you for this opportunity to testify on ``Building out Indian
Country: Tools for Community Development.''
Economic growth is an impactful antidote to the social and
financial challenges facing Native communities, and I am proud that it
is a priority for the Trump Administration. A strong economy presents
opportunities for employment, commerce and the tools necessary to
empower communities to create healthier and safer living conditions for
its members.
We believe the best vehicle for sustainable community development
is economic growth and the influx of employment opportunities it
brings. My experience in the private sector, working to develop Native
economies, and create job opportunities for Indian Country has provided
me with invaluable experience. As Assistant Secretary I have made it a
priority to implement a robust economic development agenda.
For our part, Indian Affairs provides direct and indirect support
for economic growth in Indian Country. Our economic development focal
points are: (1) the development of energy and mineral resources; (2)
increasing access to capital; (3) assisting business development; and
(4) encouraging development of transactional capacity in tribal
communities.
I am proud to appear before the Committee today as your partner and
as an advocate for community development and economic growth in Indian
Country.
Energy and Mineral Resource Development In Indian Country
Thanks to President Trump's initiative to achieve U.S. energy
dominance, the U.S. is now a leading exporter of crude oil and
liquefied natural gas (LNG). It was reported last month that the U.S.
now exports more crude oil and petroleum products than it imports and
some analysts project that we will soon pass Saudi Arabia as an
exporter of crude oil and other petroleum-based liquid fuels. \1\ U.S.
exports of LNG quadrupled in 2017 and continue to increase with the
construction of new LNG export facilities. \2\
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\1\ https://oilprice.com/Energy/Crude-Oil/US-Will-Soon-Export-More-
Oil-Liquids-Than-Saudi-Arabia.html
\2\ https://www.eia.gov/todayinenergy/detail.php?id=35512
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Indian Country directly benefits from the Administration's energy
dominance initiative. Energy royalties paid last year to Indian tribes
and allotters' totaled over $1 billion. \3\ Energy production in Indian
Country, as a source of revenue is now only second to gaming.
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\3\ https://revenuedata.doi.gov/explore/#federal-disbursements
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Energy Royalties to Indian Country
2018: $1,022,539,457 (As of October 1st 2018)
2017: $561,409,816
2016: $476,207,228
2015: $736, 839, 260
Our Department's Division of Energy and Mineral Development (DEMD),
which is part of our Office of Indian Energy and Economic Development
(IEED), currently provides technical assistance on 37 gas and oil
projects, 83 renewable energy projects, and 61 mineral projects.
These projects have the potential to generate even more energy and
mineral derived benefits for Tribes. OIEED using its internal
engineers, geologists and geophysicists have completed internal
scientific and engineer studies to determine the following resource
potential. Among them are:
A geologic study of the Pilot Butte and Steamboat Butte oil
fields at the Wind River Reservation in Wyoming whose value
DEMD estimates could exceed $50 million;
A DEMD funded, 16-mile, 3-D seismic survey at the Rocky Boys
Reservation in Montana that could be a source of tribal
revenues if the land proves productive;
An analysis of the Gallup and Fractured Mancos plays at the
Jicarilla Apache Reservation in New Mexico that could lead to
substantial revenues to the Tribe when all of its oil-bearing
lands are developed;
An examination of helium sources at the Navajo Nation in
Arizona whose development DEMD estimates could bring
significant royalties to the Navajo Nation and other Tribes in
the area;
Assistance with enhanced oil recovery methods at the Osage
Reservation in Oklahoma aimed at development of potential
reserves;
Assistance to the Metlakatla Indian Community on Annette
Island Reserve, Alaska with engineering design and construction
of its Chester Lake Penstock Extension Project to improve
hydropower and water security during drought years;
Work at the Fond du Lac Band of Chippewa Indians in
Minnesota to use woody biomass to displace propane use at the
Tribe's community center, which is saving $21,000 per year.
Engineering and planning assistance for the Tribe's development
of a 1MW solar array is saving another $80,000 per year;
Technical assistance to the Confederated Salish and Kootenai
Tribes of the Flathead Reservation in Montana which enabled
them to acquire the 188 MW Kerr Dam Hydroelectric Project.
Operated under the tribal owned company, Energy Keepers, Inc.,
this project is generating more than $9 million a year for the
Tribes;
Commissioning of a 1 MW solar array at the Picuris Pueblo in
New Mexico, which is offsetting 100 percent of the energy costs
for 50 homes and 12 tribal buildings;
Completion of feasibility and planning studies to develop a
1.5 MW wind turbine at the Spirit Lake Reservation of North
Dakota that DEMD forecasts will save over $600,000 in annual
energy costs;
Identification of a natural gas service expansion at the
Mississippi Choctaw Reservation that, by displacing propane
use, will achieve $1 million in savings per year;
Completion of engineering and planning studies at the Blue
Lake Rancheria in California for a solar-battery micro-grid
system that will save the Tribe $200,000 annually;
Completion of engineering and planning studies for a 6 MW
solar development at the Twenty-Nine Palms Reservation in
California, which DEMD believes will generate $1 million in
annual revenue;
Identification of sand and clay material at the Jemez Pueblo
in New Mexico that the Tribe will use to construct 85 durable,
energy-efficient, custom-designed homes; and
Identification of a 50-year supply of cement-grade limestone
at the Moapa Reservation of Nevada.
As we've observed the surge in energy development, we have
concurrently determined to take a close look at the Department's right-
of-way regulations as they pertain to energy and mineral resource
development in Indian Country. We've put a call out to tribal leaders,
as well as our internal institutional knowledge resources, to share how
these regulations may be improved.
Our goal is to reduce the regulatory burden for right-of-way
approval processes and better enable tribes to sustainably develop
their natural resources. Sustainable development is our intent and
Indian Affairs as a whole is working to improve service delivery and
efficiency to tribal enterprises interested in developing their
minerals, oil, gas, and other natural resources.
S. 245 The Indian Tribal Energy Development and Self-Determination Act
Amendments of 2017
Tribal Energy Resource Agreements (TERA)
Mr. Chairman, we are pleased to note the enactment of your bill, S.
245, the Indian Tribal Energy Development and Self-Determination Act
Amendments of 2017. This bill streamlines our Department's approval of
Tribal Energy Resource Agreements (TERAs), thereby encouraging tribal
self-determination in the development of energy on Indian trust lands.
TERAs authorize tribal energy contracts, leases, and rights-of-way
without unnecessary federal oversight.
On the same topic, a Department working group, under the direction
of the Acting Secretary, has been examining the issue of inherent
federal functions, which this Committee and tribes have said is an
obstacle to seeking TERAs. We hope that modifications proposed by the
working group, combined with revisions to the TERA regulations
implementing provisions of your bill, will encourage tribes to apply to
our Department for TERAs.
Tribal Biomass Demonstration Project
Your bill also authorizes biomass demonstration projects for tribes
and Alaska Native corporations. Our BIA foresters are working
diligently to implement the tribal biomass demonstration projects
authorized by the bill. Discussions are ongoing with key federal
partners as well as with tribal groups, such as the Intertribal Timber
Council, to cultivate awareness of the bill's provisions and encourage
thinking about the possibilities it presents for Indian Country, and to
identify projects that have been proposed by tribes that may be
suitable for meeting the bill's objectives.
Given the expedited statutory timeline, we will be hosting a Tribal
Consultation by telephone (ensuring maximum tribal participation) on
Friday, April 12, at 1:00 p.m. Eastern Time.
Our goal is to support projects that are portable and scalable, so
that the successes and lessons learned in one project can be expanded
for the benefit of other tribes throughout the country. Thus smaller-
sized projects may serve as test cases to be applied at a larger scale
with processes and methods that are proven and practical. We see the
heart of these demonstration projects as utilizing biomass development
to foster land management activities that expand the active forest
management, as practiced in Indian Country, to other federal lands,
with outcomes including the reduction of wildfire risks, improvement of
forest health, and the creation of much needed energy from an abundant
source of renewable forest biomass.
Increasing Access To Capital In Indian Country
As the Assistant Secretary, I am looking forward to creating
greater access to capital in Indian Country. This means building
partnerships, stepping outside of our traditional comfort zones, and
expanding our networks. I am excited to convene government agencies,
tribes, Alaska Native Corporations, and other investment officials to
form strategic partnerships and develop a roadmap to positive
investment environments in Indian Country.
Opportunity Zones
There is a groundswell of interest in Indian Country around
Opportunity Zones. Indian Affairs is grateful for the provisions
included in the Tax Cuts and Jobs Act of 2017. Congress added
Opportunity Zones to the tax code when it passed the Tax Cuts and Jobs
Act on December 22, 2017, 26 U.S.C., 1400Z-1 and 1400Z-2. An
Opportunity Zone is an economically-distressed community where new
investments, under certain conditions, may be eligible for preferential
tax treatment. We believe that there are millions of dollars in
investment funds waiting on the sidelines that this new incentive can
attract to projects and locations within Indian Country. However, we
are working to ensure that tribal voices are heard as the regulations
supporting the Opportunity Zone program are built out. As these rules
are developed, we want to ensure they are considerate of the unique
situations and circumstances surrounding trust land and resources in
Indian Country.
Tribes deserve equal footing and access to Opportunity Zones and I
am committed to working with the Committee, Treasury, and tribal
leaders to ensure that appropriate measures are taken to ensure tribes
have the opportunity to develop their local economies and investors
have the opportunity to choose Indian Country for their portfolios.
Native American Business Development Institute Grants
Indian Affairs is also pushing out on-the-ground support for tribes
and tribal businesses to take advantage of Opportunity Zones through
the IEED--Division of Economic Development Native American Business
Development Institute (NABDI) Grants. The IEED has funded tribes to
conduct feasibility studies on business endeavors since 2007.
These studies have made possible the Wells Band of the Te-Moak
Tribe of Western Shoshone of Nevada's business incubator; the first
tribal grocery store to be sourced with locally grown vegetables at the
Ft. Belknap Reservation in Montana; and the burgeoning tourist industry
of Alaska's Chilkat Indian Village, among other examples.
For the FY 2019 feasibility study grant cycle, we have created a
preference for tribal applicants focused on businesses or projects to
be located in Opportunity Zones. This powerful new tax law will be a
force multiplier for our economic development feasibility grants.
We are convinced that a new tribal business or development project
has the best chance of success when it is based on a feasibility study
conducted by an impartial, expert third-party. Such studies identify
technically implausible project proposals and logistical, financial and
market challenges. Access to capital is an important component of
economic development. Another is a credible feasibility study.
Business Development In Indian Country
Small business is the lifeblood of community development. Small
businesses are necessary to achieve the multiplier effect we strive for
in Indian Country--where a dollar turns over 5, 6, or 7 times among
community members before it leaves the local economy. Big deals with
large corporations are great, but small business development often
plays the most pivotal role in changing the lives of local citizens.
We want healthy economic environments in Indian Country that
support small business--which means a number of the items we have
already discussed: access to capital, feasibility determinations, but
it also requires a legal and regulatory regime that supports and
protects secured transactions in Indian Country.
Building Transactional Capacity In Tribal Communities
Uniform Commercial Code and Model Codes
Finally, we are helping Tribes develop legal infrastructure that is
indispensable to economic progress. According to John Koppisch, writing
in Forbes Magazine.
``Companies and investors are often reluctant to do business on
reservations--everything from signing up fast food franchisees
to lending to casino projects--because. . .commercial codes
aren't well developed. . .'' \4\
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\4\ John Koppisch, ``Why Are Indian Reservations So Poor? A Look at
the Bottom 1 percent,'' Forbes Magazine, December 13, 2011.
Most Tribes lack commercial codes to secure collateral and assure
access to credit. Without such codes, Native business persons are
unable to finance the purchase of business-related equipment from
sellers located outside tribal jurisdictions. Tribal members are often
unable to obtain credit for the purchase of equipment and business
goods off the reservation because a dealer cannot enforce his or her
lien (or security interest) in the purchased item once it has been
transported to the reservation. Without these codes and an accurate,
accessible system for filing claims, creditors may increase borrowing
costs to offset risks or refuse to lend altogether.
To address this challenge, the National Conference of Commissioners
on Uniform State Laws (NCCUSL) and a working group of tribal officials
drafted the Model Tribal Secured Transaction Act (MTSTA) as a template
for legislation by tribes to facilitate transactions with outside
lenders and businesses. \5\
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\5\ NCCUSL joined with the American Law Institute to create the
Uniform Commercial Code in 1940, providing a comprehensive solution to
conflicting state commercial codes.
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The MTSTA provides a set of rules that specify how security
interests may be created, perfected, and enforced, and who has first
rights when two or more competing creditors have legally enforceable
interests in the same collateral. Under this system, a creditor files a
financing statement at a public filing office that constitutes notice
to other interested parties about security interests in the personal
property of the debtor. This financing statement perfects (or makes
good against third parties) a creditor's security interest in most
kinds of personal property.
Once filed, a financing statement notifies the public that the
secured party may have a lien on specified personal property of a
particular debtor. Most states use the Secretary of State's office to
administer these filings. Interested parties may search filing records
there or online to determine whether certain personal property of a
debtor may be subject to a prior lien or liens.
Tribal adoption of the MTSTA has long been a priority for IEED and
it has funded tribes to explore adoption of commercial law codes
modeled on the MTSTA. It has also prepared and placed on its website a
detailed primer, ``Why Tribes Should Adopt a Secured Transactions
Code.'' \6\
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\6\ https://www.bia.gov/sites/bia.gov/files/assets/as-ia/ieed/pdf/
Why%20Tribes%20Should%20Adopt%20a%20Secured%20Transactions%20Code%2011.3
0.18.pdf
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Conclusion
Indian Affairs is committed to moving the needle in Indian Country
on many fronts, and economic development and growth is a top priority
for me and my team. While we continue to make strides with our
programs, more can be done to promote sustainable economies in Indian
Country. I am also committed to working with this committee, members of
Congress and across the Administration to develop an economic roadmap
for Indian Country development and growth.
Thank you for the opportunity to provide testimony, and I'm happy
to answer the Committee's questions.
The Chairman. Thank you, Secretary Sweeney.
I do have to ask why you did not get your testimony in
within the 48 hours?
Ms. Sweeney. My apologies to the Committee. I was late in
drafting the entire document so it was going through the review
process.
The Chairman. We would ask that you observe the 48 hour
rule. Thank you.
I have the same question, Ms. Harris, and then proceed with
your testimony.
STATEMENT OF JODIE HARRIS, DIRECTOR, COMMUNITY
DEVELOPMENT FINANCIAL INSTITUTIONS FUND, U.S.
DEPARTMENT OF THE TREASURY
Ms. Harris. Chairman Hoeven, Vice Chairman Udall and
members of the Committee, thank you very much for the
opportunity to testify before you this afternoon.
My name is Jodie Harris. I am the Director, Community
Development Financial Institutions Fund. I am honored to be
here to speak with you about the CDFI Fund's work providing
community development finance resources to support development
activities in Indian Country.
For those of you that may not be familiar with us, the CDFI
Fund was created in 1994 to provide access to credit and
capital in distressed and underserved areas unable to tap into
lending or investments from traditional financial service
providers. The CDFI Fund was established to build and invest in
a network of community-based members known as Community
Development Financial Institutions, CDFIs, to support a wide
array of community finance needs.
What makes the CDFI Fund unique is it does not invest in
specific projects or provide pas through or formula funds to
State and local governments, as is the model for most other
Federal community and economic development programs.
Instead, we invest in organizations at the enterprise
level. We do this by evaluating the strength of business plans
and management teams and then we inject flexible capital in
CDFIs that empowers them to take risks, innovate and build the
financial strength of their communities.
Activities financed and supported by CDFIs include micro
and small business enterprises, consumer savings and lending
programs, community services and facilities, commercial real
estate, and affordable housing development. Specific to Indian
Country, the CDFI Fund designates CDFIs that perform more than
50 percent of their activities in majority Native American,
Alaska Native or Native Hawaiian communities as Native CDFIs.
Currently, there are 68 certified Native CDFIs nationwide.
The origin of the CDFI Fund's focus on Native communities
traces back to 1994 when Congress mandated the completion of a
study on lending and investment practices in Native
communities. Released in 2001, the study examined the barriers
faced by Native communities in accessing capital and basic
financial services, as well as the increased challenges in
tapping into private and public sector programs.
From the study, the Native CDFI Assistance, NACA Program,
was born to support the creation and expansion of Native CDFIs.
The NACA Program has made some significant inroads and
generated considerable results. From fiscal year 2010 to 2018,
the NACA Program award recipients originated nearly $620
million in loans and investments. In addition, nearly 174,000
individuals have benefitted from financial literacy and
training programs.
Despite the progress made through the NACA Program, capital
and credit needs in Native communities are high. Access to
banking services and products remain a consistent challenge.
In May 2016, a follow-up report to the 2001 report was
completed. It showed the scope and scale of existing hurdles.
Some of the report findings included while the supply of
capital has increased, it has not kept pace with the demand and
need for capital; per capital income levels in Native
communities is less than half of what it is in non-Native
communities; and credit scores tend to be lower in Native
communities, which leads to lower home ownership rates.
In order to overcome these barriers and increase access to
credit, capital and financial services in Native communities
and to further support Native CDFIs' abilities to generate
impact in the communities they serve, the CDFI Fund has re-
launched the Building Native CDFIs Sustainability and Impact
Training and Technical Assistance Series offered through our
Capacity Building Initiative. The training is intended to
provide Native CDFIs tools to enhance their management and
operational capacity as well as show casing Native CDFI best
practices such as underwriting processes, board management,
strategic planning and portfolio management.
Through the Capacity Building Initiative, we hope to
increase the capacity of Native CDFIs to access CDFI Fund
programs beyond NACA, as well as develop capital resources
outside of the CDFI Fund. While the CDFI Fund's Native
initiatives have helped most the needle, we recognize that more
work remains. The CDFI Fund hopes that its renewed focus on
capacity building can help move the needle even further.
Again, thank you for the opportunity to appear before you
this afternoon. I look forward to answering any questions.
In response to your question about the testimony, we were
verifying the data late into Monday and we sent it over on
Monday evening. My apologies for missing the 48-hour window.
[The prepared statement of Ms. Harris follows:]
Prepared Statement of Jodie Harris, Director, Community Development
Financial Institutions Fund, U.S. Department of the Treasury
Introduction
Chairman Hoeven, Vice Chairman Udall, and Members of the Committee:
thank you for the opportunity to testify during today's hearing
entitled ``Building out Indian Country: Tools for Community
Development.'' My name is Jodie Harris. I am Director of the U.S.
Treasury Department's Community Development Financial Institutions Fund
(CDFI Fund).
The CDFI Fund's vision is an America in which all people and
communities have access to the investment capital and financial
services they need to prosper. In order to help achieve that vision,
the CDFI Fund's mission is to expand economic opportunity for
underserved people and communities by supporting the growth and
capacity of a national network of community development lenders,
investors, and financial service providers.
About the CDFI Fund
Established by the Riegle Community Development and Regulatory
Improvement Act of 1994 (Riegle Act; P.L. 103-325), the CDFI Fund has
worked for more than two decades to generate economic opportunity in
places where opportunity is needed most.
The CDFI Fund works to spur economic growth, job creation, and
opportunity in the nation's distressed and underserved communities by
offering targeted resources and innovative programs to leverage federal
dollars with private sector capital. The CDFI Fund supports mission-
driven financial institutions that take a market-based approach to
supporting economically underserved communities. These financial
institutions are encouraged to apply for certification as Community
Development Financial Institutions (CDFIs).
Since its inception, the CDFI Fund has awarded more than $3.3
billion to community development organizations and financial
institutions; guaranteed $1.5 billion in bonds through the Bond
Guarantee Program; and allocated $54 billion in New Markets Tax
Credits. These awards have leveraged billions of dollars in private
sector investment and increased the impact of CDFIs, CDEs, and other
community-based development organizations by expanding their capacity
to deliver the credit, capital, and financial services needed to
generate economic opportunity in underserved communities. While the
President's Budget for FY 2020 does not propose additional funding for
CDFI award programs, we are working hard to ensure that available funds
are deployed as quickly and effectively as possible.
About CDFIs
CDFIs are community-based financial institutions that have a common
goal of filling financing gaps in underserved and low-income areas. As
community-based institutions, they possess a keen sensitivity to the
needs of local residents and businesses, and their creation reflects a
bottom-up, rather than a top-down, approach to community investment and
revitalization.
Currently, there are nearly 1,100 CDFIs serving urban and rural
communities throughout the United States. CDFIs are located in all 50
states, the District of Columbia, Guam, and Puerto Rico. They bridge
diverse public and private sector interests to serve people and places
that traditional financial institutions usually do not. CDFIs typically
provide:
Loans for businesses and projects that otherwise would not
qualify for financing;
Safe and affordable banking services that otherwise would
not be available in the community;
Loan rates and terms that are more flexible than those
offered by traditional lenders; and
Development services--such as business planning, credit
counseling, and homebuyer education--to help their borrowers
use credit effectively and build financial strength.
The CDFI Fund's Native Initiatives
Native Communities, including Native American, Alaskan Native, and
Native Hawaiian communities, often face formidable barriers to
accessing capital and basic financial services. The CDFI Fund's Native
Initiatives generates economic opportunity for Native Communities by
supporting the creation and expansion of Native CDFIs, which in turn
help create jobs, establish or improve affordable housing, and provide
supportive financial services and counseling within their communities.
The origins of the CDFI Fund's focus on Native Communities trace
back to 1994 when Congress mandated the completion of a study (as part
of its passage of the Riegle Act) on lending and investment practices
in Native Communities. Released in 2001, the ``Native American Lending
Study'' \1\ examined the barriers faced by Native communities in
accessing capital and basic financial services, as well as the
increased challenges in tapping into private and public sector
programs.
---------------------------------------------------------------------------
\1\ https://www.cdfifund.gov/Documents/2001_nacta_lending_study.pdf
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The study affirmed the importance of developing Native CDFIs--CDFIs
that specialize in serving Native Communities--to play a key role in
the broader effort to lead Native Communities into the nation's
economic mainstream. After this study, the Native CDFI Assistance
Program (NACA Program) was launched to support the creation and
expansion of Native CDFIs.
An organization must be certified as a CDFI and primarily serve a
Native Community to be eligible for Financial Assistance through the
NACA Program. Technical Assistance is available to both Native CDFIs
and emerging Native CDFIs (those on the path to certification). To be
eligible for Native CDFI certification, at least 50 percent of an
organization's activities must serve Native Americans, Alaska Natives,
or Native Hawaiians.
The NACA Program has made some significant inroads and generated
substantive results in increasing the availability of credit and
capital in Native Communities. From FY 2010 to FY 2018, NACA Program
award recipients originated nearly $620 million in loans and
investments. Of this amount, more than $312 million was dedicated to
business and microenterprise loans and investments, financing more than
1,600 businesses; and more than $117 million was for home purchases or
home improvement financing. \2\ In addition, nearly 174,000 individuals
have been served by financial literacy and training programs. Examples
of ways in which Native CDFIs are providing access to capital and
credit include:
---------------------------------------------------------------------------
\2\ FY 2018 CDFI Fund Agency Financial Report
Citizen Potawatomi Community Development Corporation
(Shawnee, OK), a certified Native CDFI, provided a loan of more
than $40,000 to DC Cake Appeal, a small catering and baking
businesses owned by a tribal member, to help them expand their
business. The loan allowed the owners to move their home-based
business into a 4,000 square foot facility, which boasts a
commercial kitchen and serves as restaurant, bakery and event
space. The loan also helped create seven jobs in a small
---------------------------------------------------------------------------
community.
Native 360 Loan Fund, Inc. (Grand Island, NE), a certified
Native CDFI, provided financing to Native-owned startup
Cherry's Native Creations (Norfolk, NE), which sells genuine
Native-made handicrafts. The financing allowed Cherry's to
acquire inventory, grow their operations and expand their
business overseas.
Certified Native CDFI Four Directions Development
Corporation (Orono, ME) recently announced it was partnering
with Wells Fargo & Company to provide a home down payment
assistance program aimed at homeownership opportunities for
Native Americans in Maine. Four Directions will provide up to
$5,000 in down payment assistance to tribal members to help
address low rates of homeownership of Native Americans in
Native Communities in the state.
Access to Capital and Credit in Native Communities
Despite the inroads made by the NACA Program, capital and credit
needs in Native Communities are high, and access to banking services
and products remain a consistent challenge. In May 2016, the CDFI Fund
released a follow-up to the 2001 report, entitled ``Access to Capital
and Credit in Native Communities.'' \3\ It showed the scope and scale
of existing hurdles. Some of the key report findings include:
---------------------------------------------------------------------------
\3\ https://www.cdfifund.gov/programs-training/Programs/native-
initiatives/Pages/native-communities-study.aspx
While the supply of capital has increased, it has not kept
---------------------------------------------------------------------------
pace with the demand and need for capital;
Per capita income levels in Native Communities are less than
half of what they are in Non-Native Communities--and are not
expected to catch up for more than 40 years based on data
compiled in the Access to Capital report; and
Credit scores tend to be lower in Native Communities, which
leads to lower homeownership rates.
A recent survey \4\ of Native CDFIs conducted by First Nations
Oweesta Corporation also highlights that many Native CDFIs remain
undercapitalized and that engagement with traditional lending sources
remains low. This is also supported by a separate survey conducted by
the Minneapolis Federal Reserve Bank's Center for Indian Country
Development, where Native CDFIs reported an additional $48 million in
unmet funding needs from public and private sources for in 2017 alone.
\5\
---------------------------------------------------------------------------
\4\ First Nations Oweesta Corporation, ``Native CDFI Industry
Profile 2017''
\5\ Michou Kokodo, ``Findings from the 2017 Native CDFI Survey:
Industry Opportunities and Limitations.'' Federal Reserve Bank of
Minneapolis, Working Paper No. 2017-04, November 2017
---------------------------------------------------------------------------
And finally in 2017, the First Nations Development Institute and
the FINRA Investor Education Foundation released a report \6\ on
financial capability in American Indian and Alaska Native Communities,
indicating that Native Americans and Alaskan Natives:
---------------------------------------------------------------------------
\6\ FINRA Investor Education Foundation and First Nations
Development Institute, ``Race and Financial Capability in America:
Understanding the Native American Experience,'' August 2017
Among all groups, have higher levels of financial fragility
---------------------------------------------------------------------------
and distress;
Are the least likely to have an emergency savings fund in
place; and
Are less likely to have savings and checking accounts than
other groups.
This research emphasizes that while much has been accomplished in
the years since the ``Native American Lending Study'' was completed,
there is also much more to be done to provide access to credit and
capital in Native American Communities.
Fostering Innovation and Building Capacity in Native Communities
While the NACA Program supplies an important tranche of capital for
Native Communities, it should not be the only path that a Native CDFI,
or an organization that is aspiring to become a certified CDFI, can
pursue in developing and expanding its lending capabilities. Developing
the capacity of Native CDFIs to effectively compete for funding through
other CDFI Fund programs, and developing capital sources outside of the
CDFI Fund, are of critical importance. The impact of Native CDFIs can
be elevated and multiplied through innovative partnerships and
initiatives between Native CDFIs, financial and philanthropic
institutions, and other non-Native CDFIs. For example:
Mazaska Owecaso Otipi Financial, Inc. (Pine Ridge, SD) and
Lakota Funds (Kyle, SD), both certified Native CDFIs, have
partnered to increase homeownership rates for Native American
veterans. Mazaska provides a construction loan to the veteran
and then assists them in refinancing through a U.S. Department
of Veterans Affairs Native American Direct Loan after the home
is built. Mazaska and Lakota Funds work together to provide
homebuyer education and support, and to coordinate with the
U.S. Department of Veterans Affairs to convert the construction
loan to permanent financing.
Mazaska was also recently chosen-along with certified Native
CDFI Four Bands Community Fund (Eagle Butte, SD)--by the U.S.
Department of Agriculture (USDA) to participate in a Section
502 relending pilot program on tribal lands to help low-income
families pursue home ownership. Under the pilot, USDA provided
each CDFI with $800,000 in funding, which each CDFI matched
with $200,000, to relend to Native American families in Native
Communities in South Dakota and North Dakota.
In spring of 2018, First Nations Oweesta Corporation
(Longmont, CO), a national Native CDFI intermediary, launched a
$10 million Native CDFI Capital Pool to exclusively fund the
capital needs of Native CDFIs. The pool is intended to leverage
larger amounts of lending capital for Native CDFIs who invest
in the pool. They are able to receive up to $1 million in
capital--either in loans or in a loan/grant combination. 13
Native CDFIs contributed to a shared-risk pool, to which
Oweesta provided matching resources. The Capital Pool was
capitalized by loan and grant resources from a number of
philanthropic and financial institutions. All $10 million from
the Capital Pool has been deployed to support a variety of
housing, consumer, and small business lending activity. The
Capital Pool is designed to leverage the capacity and
relationships between Native CDFIs to provide access to long-
term low-cost capital.
Clearinghouse CDFI (Lake Forest, CA), a non-Native CDFI,
seeks out value-added partnerships with Native CDFIs to fund
projects that Native CDFIs could not finance alone due to
limited capital. In total, Clearinghouse has deployed roughly
$65 million to projects in Native American communities. To help
them development partnerships and collaborative opportunities,
Clearinghouse established a Native American advisory board--
which includes Native CDFIs and Native-owned businesses--that
meets quarterly to discuss opportunities and challenges in
Indian country.
Midwest Minnesota Community Development Corporation (MMCDC)
(Detroit Lakes, MN) created a subsidiary Native CDFI: the White
Earth Investment Initiative, which focuses on development in
and around the White Earth Reservation in Northwest Minnesota
as well as lending in Native American Communities across
Minnesota. In addition, because the White Earth reservation is
within MMCDC's target market, there is one seat reserved on
MMCDC's board for a tribal appointee, and they also have
another elected member from the White Earth Reservation.
The Metlaka Indian Community in Alaska worked with Tongass
Federal Credit Union (FCU) (Ketchikan, AK), a certified CDFI,
to establish a financial services and banking presence on the
remote island community after the area's only bank branch
closed in 2005. Tongass FCU began offering services once a week
at the Metlakatla Indian Community council chambers in the
summer of 2005. Tongass FCU established a local advisory board
for the Metlakatla branch, which helped the credit union
develop and target its services to the community. In 2012,
Tongass FCU completed a new branch building in Metlakatla. The
new branch is staffed by six employees who are all from the
Metlakatla Indian Community.
To achieve higher levels of innovation, increased capital access,
and to further support Native CDFIs' abilities to increase their impact
in the communities they serve, the CDFI Fund has relaunched the
``Building Native CDFIs' Sustainability and Impact'' training and
technical assistance series offered through our Capacity Building
Initiative.
The training is designed to provide Native CDFIs tools to enhance
their management and operational capacity, as well as to showcase
Native CDFI best practices (such as underwriting processes, board
management, strategic planning and portfolio management). Native CDFIs
and similar organizations that join this initiative will have access
to:
Individualized technical assistance, focused on addressing
their organization's specific capacity building needs;
In-person workshops that bring together Native CDFIs and
similar organizations from across the country for knowledge
sharing, skill building, and practical action planning (with
scholarships available for travel and lodging costs);
Webinars on a variety of topics related to sustainability
and impact; and
Peer learning opportunities.
In addition to this, the CDFI Fund has worked to reduce impediments
to accessing NACA Program resources. In 2017, the application for NACA
Program Financial Assistance and Technical Assistance was revamped.
This restructured application has reduced the burden to apply for
assistance, and has provided applicants a better opportunity to
accurately describe their organization and the impact they can make
with an award.
Conclusion
Last week, the CDFI Fund opened the fiscal year 2019 application
round of the NACA Program, for which we anticipate awarding nearly $14
million in Financial Assistance and Technical Assistance awards. We are
confident these awards will increase the capacity of Native CDFIs, and
organizations seeking to become certified CDFIs, to provide access to
capital and critical community revitalization initiatives.
While the CDFI Fund acknowledges the substantial challenges and
impediments that remain to accessing capital and credit in Native
Communities, we are optimistic about the track record of impact and
achievements of Native CDFIs. Last year alone, NACA Program awardees
originated more than $75 million in loans and investments, which is an
indicator of their potential for future success. The CDFI Fund remains
committed to developing the capacity of Native CDFIs and increasing
access to credit and capital in our nation's Native Communities.
Chairman Hoeven, Vice Chairman Udall, and Members of the Committee,
this concludes my statement. I thank you for the opportunity to
testify. I look forward to taking your questions.
The Chairman. Thank you, Ms. Harris.
Mr. Childs.
Mr. Childs. Before I begin my testimony, I want to
apologize for missing the 48-hour rule. This testimony is very
important. The issue will be addressed and it will not happen
again. Thank you.
The Chairman. Thank you.
STATEMENT OF HENRY CHILDS II, NATIONAL DIRECTOR,
MINORITY BUSINESS DEVELOPMENT AGENCY, U.S.
DEPARTMENT OF COMMERCE
Mr. Childs. Thank you, Chairman Hoeven, Ranking Member
Udall, and members of the Committee for the opportunity to
appear before you today. I am honored to testify on behalf of
the Minority Business Development Administration in the
Department of Commerce.
Since my appointment as National Director, I have been
laser focused on developing the 11 million minority businesses
across the United States. Secretary Ross and I are working to
implement the Administration's plan to modernize MBDA for the
future through technology, market-driven business development
programs, and leveraging data, policy and strategic
partnerships.
Between fiscal years 2012 and 2017, MBDA invested $8.7
million in MBDA business centers in Indian Country. During this
five year award period, these business centers secured more
than $3.6 billion in contracts and capital for their clients,
leading to the creation and/or retention of over 14,400 jobs.
In fiscal year 2017, MBDA undertook a series of tribal
cultural consultations to better understand the needs of Indian
Country. We also conducted our first ever listening session
with Native Hawaiian businesses, organizations, community
leaders and other stakeholders. I am very proud of that.
The overarching lessons learned from the tribal
consultations can be summarized in the following themes. One
size does not fit all is number one. The importance of tribal
sovereignty is number two. The need for MBDA to better educate
and advocate is number three. The need to leverage technology
to provide resources and tools is number four.
These tribal consultations helped MBDA envision a new
approach to business development in Indian Country involving
more flexible competitive grant competitions. I am very happy
with the results. This new approach eliminated the non-Federal
cost share, provided greater flexibility to grant recipients
and reduced the administrative and programmatic burden
associated with traditional MBDA business centers.
In 2018, we issued a broad agency announcement to solicit
innovative solutions to common business development needs
identified during the tribal consultations. We received more
than 40 grant applications specific to Indian Country
requesting upwards of $20 million funding.
MBDA made ten awards totaling $3.2 million. That is three
times the dollar investment we made in the previous year with
the business center model and double the number of grant
recipients.
This spring I am proud to announce MBDA will be releasing a
Notice of Federal Funding Opportunity to solicit special
projects and programs for the American Indian, Alaska Native,
and Native Hawaiian communities. I welcome this Committee's
support for and your assistance with promoting our agency
announcement.
Again, I am very passionate about MBDA's mission and the
role we serve in growing and developing minority businesses,
especially in Indian Country.
Thank you again, Mr. Chairman, Ranking Member Udall and
members of the Committee for the opportunity to testify today.
[The prepared statement of Mr. Childs follows:]
Prepared Statement of Henry Childs II, National Director, Minority
Business Development Agency, U.S. Department of Commerce
Introduction
Thank you Chairman Hoeven, Ranking Member Udall, and members of the
Committee for the opportunity to appear before you today. I am honored
to appear before you today to testify on behalf of the Minority
Business Development Agency (MBDA) in the Department of Commerce.
Bipartisan congressional support over the years has contributed to
MBDA's success in fostering minority business development since 1969.
We welcome this hearing as an opportunity to discuss the tools MBDA has
available to support community development in Indian Country.
Since my appointment as MBDA National Director, I have placed a
great deal of emphasis on implementing transformative initiatives to
increase MBDA's impact on Minority Business Enterprises (MBEs).
Secretary Ross and I are working to implement the Administration's plan
to modernize MBDA for the future through technology, market-driven
business development programs, and leveraging data, policy and
strategic partnerships. Specifically, the Administration seeks to
increase the number of minority-owned firms with annual gross receipts
of a million dollars or more from 2 percent to 3 percent over the next
five years.
MBDA in Indian Country
It is estimated there are more than 11 million minority-owned firms
in the U.S., approximately 273,000 of which are American Indian and
Alaska Native-owned firms. \1\ MBDA has a strong track record of
working in Indian Country to promote economic empowerment and self-
determination through entrepreneurship. Historically, MBDA's primary
service delivery model has been through brick and mortar business
centers that provide management and technical assistance to reach
American Indian and Alaska Native business owners. MBDA business
centers are operated by third party stakeholders who compete for an
MBDA grant and enter into a cooperative agreement with MBDA to achieve
distinct performance metrics.
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\1\ U.S. Census Bureau, 2012 Survey of Business Owners
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Because MBDA is focused on achieving strategic economic impact,
MBDA steers its business centers to primarily serve minority businesses
with revenues of a million dollars or more, and/or businesses with
rapid growth potential. Between fiscal year 2012 and fiscal year 2017,
MBDA invested $8.7 million in MBDA Business Centers in Indian Country.
During this five-year award period, these business centers secured more
than $3.6 billion in contracts and capital for their clients, leading
to the creation and/or retention of over 14,400 jobs. The grant cycle
for these five MBDA Business Centers in Indian Country came to an end
in FY 2018.
Lessons Learned: Tribal Consultations
It is MBDA's standard operating procedure to reevaluate its service
delivery model at the natural conclusion of the business centers'
multi-year grant cycle. MBDA undertook a series of tribal consultations
between November 2016 and February 2017 in anticipation of the grant
cycle coming to an end for the MBDA Business Centers in Indian Country.
Five tribal consultations were conducted between MBDA and federally
recognized tribes, American Indian and Alaska Native business/trade/
economic organizations, and American Indian and Alaska Native-owned
firms. To supplement our tribal consultations, MBDA also conducted its
first listening session with Native Hawai`ian businesses,
organizations, community leaders, and other stakeholders.
The purpose of the tribal consultations is to provide an
opportunity for tribal leaders to provide their input on how MBDA could
better provide business development services and programs in Indian
country as the Agency considered how, and whether, to structure a new
grant opportunity for Indian Country in lieu of the current MBDA
Business Center program. The information gathered from these
consultations was informative. Overarching lessons learned from the
tribal consultations can be synthesized into the following themes:
1. One-size does not fit all: A uniform approach to business
development in Indian Country constrains creative approaches to
localized needs. Prescriptive criteria for the type of firms to
serve and strict performance outcomes limit impact and
potential. MBDA marketing and outreach materials should also be
culturally relevant to specific American Indian, Alaska Native,
and Native Hawai`ian communities.
2. Tribal sovereignty: Recognize and honor the unique
political relationships Tribes have with the United States
Government; and the legal differences between Tribes, Alaska
Native Corporations, Alaska Villages and Native Hawai`ians.
3. Advocate and educate: MBDA can serve an important role as a
champion for American Indian, Alaska Native, and Native
Hawai`ian communities with other federal agencies, policy
makers and public servants. Conversely, MBDA can provide high
level business development training to Tribal Board members.
4. Leverage technology: Minimize the time and cost of business
education, coaching and technical assistance by providing more
resources and tools on-line through web and cloud-based
platforms, webinars, teleconferences and mobile devices.
The most common business development needs cited during the tribal
consultations were access to capital, business training, coaching on
federal procurement, business incubator and accelerator programs, and
infrastructure enhancements.
Flexible Grants
These tribal consultations helped MBDA envision a new approach to
business development in Indian Country involving more flexible
competitive grant competitions. This new approach would eliminate the
non-Federal cost share, provide greater flexibility to grant
recipients, and reduce the administrative and programmatic burden
associated with traditional MBDA Business Centers.
In 2018, we issued a competitive grant competition to solicit
innovative solutions to common business development needs in Indian
Country that were identified during the tribal consultations. We
received more than 40 grant applications specific to Indian Country
requesting upwards of $20 million in funding. As a result of the grant
solicitation, MBDA made 10 awards totaling $3.2 million. (See
Attachment A for a list of the specific awards). This represents almost
3 times the dollar investment made in Indian Country compared to the
year before under the MBDA Business Center model; and double the number
of grant recipients. Let me share with you three projects that
illustrate Native-inspired solutions:
1. United Tribes Technical College (UTTC), located in Bismarck
ND, previously operated a MBDA business center and only
provided services to individual business owners. Today, with
less prescriptive program requirements and performance metrics,
UTTC has diversified its approach and is now working with 12
Tribal Nations in the Great Plains region to maximize Tribal,
state and Federal resources and opportunities for economic
development on a larger scale. This is in addition to UTTC's
work assisting a portfolio of established business enterprises
with management and technical assistance; and helping new
start-up businesses obtain capital.
2. The American Indian Science and Engineering Society (AISES)
in Albuquerque, NM is focused on developing the next generation
of Native American entrepreneurs interested in developing STEM-
related businesses in Arizona, Nevada and Utah. With funds from
MBDA and other sources, the AISES is coaching, training, and
assisting a cohort of 24 Native STEM graduates and/or
professionals with entrepreneurial and business management
skills. An additional benefit of this program is the access it
provides to business experts, resources and tools.
3. The National Center for American Indian Enterprise
Development in Mesa, AZ is using funds from MBDA to broaden its
reach to Native Americans located in the East Coast through
one-day institutes and its on-line business ecosystem, known as
the Native Edge. By recruiting more Native firms to the Native
Edge, the project fosters Native-to-Native business exchanges,
employment, and access to procurement and capital
opportunities.
We are very pleased with the work being performed by the grant
recipients and look forward to reviewing their semi-annual reports.
In FY 2019, MBDA will continue supporting business development in
Indian Country using a similar approach. We will be releasing a Notice
of Federal Funding Opportunity to solicit special projects and programs
to address common business development needs within the American
Indian, Alaska Native, and Native Hawai`ian communities this spring. I
welcome this Committee's support for our new approach and your
assistance with promoting our competitive grant programs. We are eager
to make investments that will have a positive impact in Indian Country.
MBDA's Office of Policy Analysis and Development
Another way MBDA can impact more MBEs is through its work as a
policy, research and advocacy authority. Since Congress approved MBDA's
request to establish an Office of Policy Analysis and Development
(OPAD), we have been working to operationalize the new unit. Last
October, MBDA produced the State of Minority Business report based on
the results of the Census Bureau's 2012 Survey of Business Owners and
data from the Annual Survey of Entrepreneurs. We also launched a data
visualization tool on our website that allows visitors to see key
statistics about the number of minority-owned firms in each state, by
race and ethnicity. OPAD is responsible for promoting MBDA's domestic
economic growth and job creation agenda by providing data and research,
in-depth analysis, and comprehensive policy recommendations for
minority business development based on economic and industry trends.
Conducting data analyses about American Indian, Alaska Native and
Native Hawai`ian (AIANNH) businesses and producing special reports of
interest to AIANNHs is expected.
MBDA's Virtual Business Center
MBDA is also taking steps to better leverage technology through its
Virtual Business Center (VBC). The VBC serves as a virtual platform for
strategic partners to provide services to minority-owned businesses.
This approach is a natural evolution of how MBDA provides management
and technical assistance to an ever-expanding base of minority business
enterprises. The VBC supports MBDA's mission by ensuring MBEs,
regardless of geographic location, gain greater access to the products
and services that support their growth and development.
The Office of Native American Business Development
Additional strategies and tools for advancing economic development
in Indian Country were made available by this Committee when it passed
the Native American Business Development, Trade Promotion, and Tourism
Act of 2000, which later became Public Law 106-464. Although funds were
never appropriated to establish the Office of Native American Business
Development (ONABD) at the Department of Commerce, nor was it stood up
as envisioned by Public Law 106-464, many of the programmatic
objectives have since been provided by MBDA, the Economic Development
Administration, the International Trade Administration, the U.S. Census
Bureau, and other Department of Commerce bureaus. Between 2005 and
2013, MBDA utilized funds from its base budget to staff ONABD with a
director through an expert consultant appointment. The ONABD director's
primary role was to work directly with American Indian tribes, Alaska
Native Corporations, and AIAN firms; and to collaborate with Department
of Commerce Bureaus and other federal agencies.
I understand this Committee, particularly Chairman Hoeven, has a
special interest in the Office of Native American Business Development,
and I would like the Committee to know that I am working with Secretary
Ross and the Department to restore the director position and revive the
ONABD. I welcome the opportunity to work with you on this shared
priority.
MBDA: Winning the Future
With the number of minority-owned growing firms that gross over a
million dollars in annual revenues stalled at 2 percent, the work MBDA
does to build more firms of size and scale is even more important than
it was when the MBDA was founded 50 years ago. Firms that cross the
million dollar revenue threshold are poised to have a positive impact
in their communities through job creation. Further, firms of size and
scale expand the tax base making it possible for towns, cities, and
states to provide much needed infrastructure to their citizens. This is
no more evident than in Indian Country where tribal members are
yearning for economic prosperity.
That is why I am passionate about MBDA's mission and the potential
we have to make a difference in the lives of the American people. Thank
you again, Mr. Chairman, Ranking Member Udall, and members of the
Committee for the opportunity to testify today.
Attachment A
FY 2018--MBDA Broad Agency Announcement Grant Recipients--American
Indian-Alaska Native-Native Hawai`ian Projects
------------------------------------------------------------------------
Organization's Project
Name Coordinator Address City ST Zip
------------------------------------------------------------------------
American Indian Sarah 4263 Albuquerqu NM 87109
Science and EchoHawk Montgomery e
Engineering Blvd. N.E.
Society Suite 200
Asian, Inc. Michael Chan 1167 Mission San CA 94103
Street, 4th Francisco
Floor
Council for Danielle 91-1270 Kapolei HI 96707
Native Hawaii Chavez Kinoiki
Advancement Street
Kauffman & Joann 165 S. Spokane WA 99201
Associates, Inc. Kauffman Howard St.,
Suite 200
National Center Christopher 953 E. Mesa AZ 85204
for American James Juanita
Indian Ave.
Enterprise
Development
New Mexico Peter Holter 219 Central Albuquerqu NM 87102
Community Ave. N.W. e
Capital Suite 200
Rural Community Stanley 3120 W. CA 95691
Assistance Keasling Freeboard Sacrament
Corporation Dr. o
Rural Enterprises Scott Dewald 2912 Durant OK 74701
of Oklahoma, Enterprise
Inc. Blvd.
United Tribes Charles 3315 Bismarck ND 58504
Technical Archambault University
College Dr.
University of Rebecca Beck 3211 Anchorage AK 99508
Alaska- Providence
Anchorage Drive
------------------------------------------------------------------------
The Chairman. Thank you, Director Childs.
Now we will turn to Ms. Ponti-Lazaruk.
STATEMENT OF JACQUELINE PONTI-LAZARUK, CHIEF
INNOVATION OFFICER, RURAL DEVELOPMENT, U.S.
DEPARTMENT OF AGRICULTURE
Ms. Ponti-Lazaruk. Thank you and good afternoon, Chairman
Hoeven, Vice Chairman Udall and members of the Committee.
I appreciate the opportunity to represent USDA Rural
Development to discuss how Native American tribes use our
programs to deploy infrastructure and drive community and
economic development.
RD is a major driving force for economic development in
rural America. We manage a loan and grant portfolio of over
$225 billion administered by the Rural Utilities, Housing and
Business Services. Together, they help communities build
stronger economies, create jobs and improve the quality of life
in rural America.
In 2017, Secretary Purdue created the Innovation Center
within RD, which I lead as the Chief Innovation Officer. A
major part of what the IC does is analyze RD's performance,
policies and strategies, and find ways to improve program
delivery to all our customers. The IC is also charged with
facilitating partnerships to advance our mission.
RD is fully committed to building on past investments and
improving our ongoing support to tribal Nations throughout
Indian Country and Alaska. Since 2001, we have invested more
than $6.2 billion in loans and grants that will benefit
American Indians and Alaska Natives for years to come.
Nearly half a billion was invested last year alone and has
been deployed to support a variety of projects, projects like
an early childhood development center and day care facility for
the Spirit Lake Tribe in Fort Totten, North Dakota or a loan to
Hopi Telecommunications in Arizona to bring higher speed
broadband service to more than 650 tribal customers.
We recognize some of the challenges faced by Indian Country
are unique. Congress provided RD with tools to help drive
investments to serve tribal areas. This includes tribal-
specific funding in six RD programs and the RUS SUTA provisions
that enable eligible applicants in substantially underserved
trust areas to seek special terms for certain projects.
While the tribal-specific programs account for
approximately $50 million in funded projects yearly, it is
important to note that the vast majority of our investments
flow through our core programs such as the $399 million
invested in fiscal year 2018.
RD's suite of programs enables us to serve customers at
almost any stage of development. The variety of loan, grant and
technical assistance products and services provide tribes and
those who serve them with a path to investing and growing over
time to provide critical services to their members.
We understand providing access to broadband is a high
priority for many tribal leaders. In the last eight years, RD
has provided more than $600 million in loans and grants to
support broadband infrastructure and services on tribal lands.
RD's ReConnect Program is the most recent to offer
broadband financing and includes priority points for applicants
that serve tribal lands and to tribes. Eligible tribes can also
invoke SUTA in this program. RD is hosting six ReConnect
workshops around the Nation, one-third of which are located
near tribal lands or at tribal venues.
In addition to ReConnect, RD is beginning its work to
implement the new broadband provisions in the Farm Bill. We
will engage and listen to tribal perspectives as we implement
these new provisions.
For many tribal communities, understanding which RD
programs meet their needs can be challenging. We provide
technical assistance directly to tribes in collaboration with
partners and through grants to private technical assistance
providers. In addition to technical assistance, we are also
continuously exploring ways in which we can more strategically
engage our customers and deliver our programs.
In RD's new Innovation Center, we are building our
analytics capabilities to support more strategic engagement
with tribes and other rural customers. We are also exploring
new ways and approaches to improve program delivery.
For example, we are stepping out of our traditional housing
business model and piloting a new partnership with two Native
community development financial institutions in an effort to
increase homeownership on trust lands in parts of North and
South Dakota.
The 2018 Farm Bill offers us other opportunities to
innovate and serve. It reauthorizes RD programs that support
tribal economic development and provides new tools that will
enable us to better serve the needs of tribal Nations. Big or
small, these changes will make a real impact on program
delivery.
The New Farm Bill authorizes us to refinance certain
hospital, telecommunications and electric loans. We understand
that these authorities are of interest to tribal leaders and we
look forward to engaging on this issue in the upcoming USDA
Farm Bill consultations.
We are also directed to establish a technical assistance
program to improve tribal access to RD programs. We look
forward to tribal consultation and listening sessions in the
months ahead to hear how best to implement this section of the
Farm Bill.
We continue to actively support all tribal Nations in our
efforts to improve the quality of life for their members. To do
so, we will partner with public and private entities to fund
projects, leverage the many tools and authorities Congress has
provided to us, and work to provide faster, friendlier and more
efficient service and access to all RD programs.
Thank you for the opportunity to highlight our efforts
today. I look forward to answering your questions.
[The prepared statement of Ms. Ponti-Lazaruk follows:]
Prepared Statement of Jacqueline Ponti-Lazaruk, Chief Innovation
Officer, Rural Development, U.S. Department of Agriculture
Chairman Hoeven, Vice Chairman Udall and Members of the Committee,
I appreciate this opportunity to represent USDA and to discuss our
programs within Rural Development (RD), including how our nation's
tribes utilize these programs to build out critical infrastructure and
as tools for community and economic development.
Rural Development's mission is to increase economic opportunity and
to improve the quality of life for all rural citizens. We meet this
mission by focusing on investments in economic development and
infrastructure, by building and leveraging partnerships, and by seeking
new ways of delivering our programs through ongoing innovation.
RD manages a loan portfolio of more than $225 billion administered
by three agencies: the Rural Utilities Service (RUS), the Rural
Businesses and Cooperative Service (RBS), and the Rural Housing Service
(RHS). RD investments support rural residents looking for affordable,
safe housing; municipalities seeking water infrastructure and community
facilities; and small rural businesses, co-ops, and agricultural
producers looking to expand into new markets. We are also a vital
source of financing for rural broadband and electric infrastructure.
Together, RD agencies work to help communities build stronger
economies, create jobs, and improve the quality of life in rural areas.
In 2017, Secretary Perdue created the Innovation Center (IC) within
RD, which I oversee as Chief Innovation Officer. A major part of what
the IC does is analyze RD's program performance, policies and
strategies, and find ways to improve program delivery to all our
constituencies, including throughout rural tribal reservations. Our
mission is to equip rural communities with economic development tools
to drive rural prosperity. We achieve this by identifying best
practices in economic development, promoting multi-sector partnerships
and capacity at the local level, and driving synergies by promoting
collaboration across agencies.
The more than 40 programs that RD administers offer tribal leaders
and members access to financial and technical assistance. We recognize
the tremendous need for these types of resources in tribal communities
and are fully committed to building on past investments and improving
our ongoing support of tribal nations and Alaska. Secretary Perdue and
Acting Assistant to the Secretary for Rural Development, Joel Baxley,
place a high priority on improving program delivery to drive
investments and promote development in Native communities.
RD agencies have a long history of investing in tribal economies.
Since 2001, Rural Development has invested more than $6.2 billion in
loans and grants that will yield benefits to American Indians and
Alaska Natives for years to come. Of this investment, $449 million was
invested last year alone and has been deployed through a variety of
projects.
For example, RD provided a $7.6 million loan to the 1994 land-grant
Cankdeska Cikana Community College to build an early childhood
development center and daycare facility for the Spirit Lake Tribe
located in Ft. Totten, North Dakota. This new facility replaced several
older facilities and will provide an educational head start for Spirit
Lake's children.
In 2018, RD also provided a $5.8 million dollar Telecommunications
Infrastructure Loan to Hopi Telecommunications, Inc in Arizona. This
investment will be used to construct fiber-to-the-premises (FTTP)
systems in the Keams Canyon, Kykotsmovi and Polacca exchanges and make
additional system improvements. It is expected that approximately 650
customers will be placed on the FTTP system, while customers who remain
on the copper system or wireless system will all be able to access
speeds of at least 10 Mbps upload and 1 Mbps download.
Also in FY 18, through our Community Facilities loan program, we
made numerous investments to tribes to help finance essential community
facilities. For example, we provided a $4.8 million direct loan to the
Yakutat Tlingit Tribe in southeast Alaska to construct a healthcare
clinic, an $8 million direct loan and $3 million in guaranteed loans to
the Blackfeet Nation in Montana construct a new senior care facility
and a $1.4 million direct loan to the Red Lake Nation in Minnesota for
the 2nd phase of construction of the Red Lake Community Center.
Many RD programs are expressly designed to help alleviate the
challenges faced in the most remote corners and persistently poor
communities across the United States. We recognize that while many
challenges faced by tribal nations are shared by all rural communities,
these communities also face unique challenges. Through your leadership
and support, Congress has provided RD with special tools to help drive
investments to tribes and their members, as well as the 1994 land-grant
tribal colleges and universities, including the mandatory funds we
receive each year. It also includes the RUS Substantially Underserved
Trust Area (or SUTA) provisions. The SUTA provisions provide additional
flexibilities in our rural utilities programs to help drive investments
in trust areas that are substantially underserved.
Historically, RD has had funds provided by Congress for Tribal
projects in the following programs:
The Community Facilities program through the Tribal College
and University Grant Initiative;
The Rural Business Development Grant program;
The Intermediary Relending program;
The Water and Environmental Grant program;
The Rural Alaska Village Grant program; and,
The Business and Industry Loan Guarantee program.
These special tools ensure that tribal nations have access to funds
for critical investments that benefit tribes and tribal members. In a
typical year, approximately $50 million in program authority is
legislatively mandated for tribal projects across these six RD
programs. However, the vast majority of RD's investments benefitting
tribes and Native Americans flow through our traditional programs.
Using FY 2018 as an example, RD invested almost eight times the amount
($399 million) in loans and grants that benefitted American Indians and
Alaska Natives through our traditional programs compared to the tribal
set-asides.
RD often partners with other government and private financing
entities on projects, including those serving tribes. For example, when
the Mississippi Band of Choctaw Indians needed to build a new health
center, funding from the tribe, RD's Community Facilities (CF) Program,
and the Indian Health Service (IHS) were combined to support the
project. In 2013, RD provided a $40 million CF direct loan, a
commercial bank provided a $10 million loan that was then guaranteed
through the CF program and the Choctaw contributed $5 million to the
project. The result is a successfully operating new 20-bed hospital
that also provides tribal members with outpatient, dental, emergency,
trauma, behavioral health and community and public health services.
RD's suite of programs enable us to serve our customers at almost
any stage of development, from initial concept, to project and
community planning, application development and construction. The
variety of loan, grant, and technical assistance products and services
provide tribes and those who serve them with a path to investing and
growing over time to provide critical services to their members. Sacred
Wind Communications (SWC), a New Mexico-based telecommunications
provider, is a good example of this, first with a small RD grant in
2005, and then with larger loans from RD that gave them the resources
to scale and expand their reach. In 2005, SWC was first awarded a RUS
Community Connect broadband grant for $436,461 to provide both phone
and Internet services to Huerfano, New Mexico--a small town of
approximately 400 residents, located on the Navajo Nation reservation.
SWC contributed an additional $86,500 of its own funds to guarantee the
success of the project. Telephones were installed in all community
buildings, connectivity was delivered to key community buildings, and a
new Computer Training Center was opened to the public. More recently,
SWC has since also received multiple telecommunications loans from RUS,
including a $13.8 million loan in March of 2016 to improve Internet
service within the Navajo Nation in northwest New Mexico. The loan was
awarded with a lower interest rate (2 percent) under the Substantially
Underserved Trust Area (SUTA) provisions of the 2008 Farm Bill. The
SUTA provisions were implemented as part of a long-term strategy to
assist tribes in meeting their utility infrastructure needs and
improving economic development.
Leveraging the right programs at the right time enabled SWC to grow
over time into a company that now serves tribal members across 22
Navajo Nation chapters.
Broadband
RD is building on its commitment to support deployment of critical
infrastructure and to promote economic development in tribal areas.
With an estimated 35 percent of residents of tribal lands still lacking
broadband service, we understand that providing access to broadband is
a high priority for many tribal leaders. From FY 2010-2017, tribal
organizations benefited from $259.6 million in RUS loans, grants, or
loan/grant combinations that were provided to tribal or non-tribal
providers to support broadband infrastructure and programs on tribal
lands. During that same time period, tribes directly benefited from
$317.1 million in Broadband Initiative Program (BIP) grants and nearly
$3 million in BIP Technical Assistance grants. In addition, $23.1
million in Community Connect grants were awarded to tribes, tribally
owned broadband providers, and other entities that bring broadband
service to unserved tribal areas.
RD's ReConnect is the most recent program to offer loans, grants
and loan/grant combinations to finance broadband infrastructure
projects through eligible rural entities, including tribes.
The scoring criteria for Round One of ReConnect includes priority
points for applications that serve tribal lands. Eligible tribal
applicants may also invoke SUTA on ReConnect applications, particularly
on interest rates. To ensure potential applicants understand the
program and its eligibility requirements, RD is hosting six workshops
around the nation. At least two of the workshops are located near
tribal lands or at tribal venues, including one that is concluding
today (April 10) in Tucson, AZ at a Pascua Yaqui owned facility. More
information about the workshops can be found on the ``Events'' page at
https://reconnect.usda.gov. We are hopeful that efforts such as these
will encourage tribes to apply and equip them to prepare competitive
applications for this funding opportunity.
In addition to ReConnect, RD is beginning its work to implement new
broadband provisions from the 2018 Farm Bill. As always, we will engage
and listen to tribal perspectives as we implement these new provisions.
Technical Assistance
For many tribal communities, understanding which RD programs meet
their needs can be challenging. Advice and assistance are available to
RD applicants and borrowers throughout the planning, filing, and build
out of projects. RD provides technical assistance to tribes directly,
in collaboration with partners and through grants provided to private
technical assistance providers. Several programs, including the Water
and Environmental Programs (WEP), the Community Facilities (CF) Program
and the new ReConnect program offer funding for technical assistance
and training.
For example, WEP administers a Technical Assistance and Training
(TAT) Grant program, as well as a Solid Waste Management Grant (SWM)
program, both of which are available and subscribed to by tribal and
Alaska native communities. Grantees of these programs provide a variety
of training and assistance to rural water and waste utilities in
everything from board governance and rate setting, to asset management.
From 2007 to 2018, USDA awarded $12.4 million in SWM grants and $24
million in TAT grants to tribes and non-profit entities to help tribes
with technical assistance and training needs related to water, waste
water, and solid waste management. In 2018, 47 percent of the TAT grant
recipients were tribes or entities serving tribes.
RD funded circuit riders also provide hands-on technical assistance
to tribes in operating water systems. For example, when the Jemez
Pueblo community in New Mexico became concerned with health impacts
because red-colored water began flowing from their taps, they contacted
the New Mexico Rural Water Association for help. Rural Water's Circuit
Rider was able to determine that the reddish water was being caused by
an improperly functioning chlorine injection pump. Working together,
the RD funded Circuit Rider and the Pueblo staff rebuilt and calibrated
the pump to deliver clean safe water to the 1,000 members on the
system.
In August of 2018, Rural Development Oklahoma partnered with the
Native American Finance Officers Association and the University of
Arkansas' Indigenous Food and Agriculture Initiative to provide
training for RD Oklahoma Community Programs Staff on reading Tribal
financial statements and underwriting tribal deals. As a result, the
Community Programs staff in Oklahoma is better prepared to underwrite
tribal deals and deploy more of RD's funding to tribes throughout the
state.
In terms of outreach, RD employs a full time National Native
American Coordinator who works across all RD programs and provides
support to RD staff and Tribes across the Nation. And in each state
that serves at least one federally recognized tribe, RD appoints a
Native American Coordinator, customarily as a collateral duty, to serve
as a single point of contact for tribes in that state.
Innovating for Better Service
RD is continuously exploring ways in which we can more
strategically engage our customers and deliver our programs. Secretary
Perdue has a clear vision for USDA programs to be delivered
efficiently, effectively, and with integrity and a focus on customer
service. Through RD's new Innovation Center, we are building our
analytics capabilities to support data-driven decisionmaking and more
strategic engagement. We intend to use this new function to
strategically target our outreach to tribes and other rural customers.
RD is also looking at new approaches to improve program delivery.
For example, RD is partnering with two Native Community Development
Financial Institutions (NCDFIs) that have extensive experience working
in Native American communities. In FY 2018, RD obligated $800,000 each
to Mazaska Owecaso Otipi Financial and to Four Bands Community Fund.
The organizations will relend the money to eligible homebuyers for
mortgages on South Dakota and some North Dakota Tribal trust lands.
Mazaska Owecaso Otipi Financial and Four Bands Community Fund also will
service the mortgage loans after they are made. RD is providing the
funding through the Single Family Housing Direct Loan program.
Each NCDFI contributed $200,000 for mortgages in the pilot program.
RD is stepping out of its traditional business model with this pilot in
an effort to increase home ownership on trust land. RD has helped
nearly 4 million rural residents purchase homes since passage of the
Housing Act of 1949. However, homeownership rates on tribal lands
historically have been significantly lower than those for other
communities. Both NCDFIs have deep ties to the local communities and
will be able to reach potential homebuyers more effectively than USDA
and other lenders. Currently, mortgage applications are pending with
both NCDFIs and loans are anticipated in the coming months. RD will
monitor the success of this pilot to determine whether to request the
authority to expand its reach.
New Opportunities in the 2018 Farm Bill
The 2018 Farm Bill reauthorizes RD programs that support tribal
economic development and provides new tools that will enable RD to
better serve the needs of tribal nations. Big or small, these changes
will make a real impact on program delivery.
We thank this Committee and the Agriculture Committees for the
update to the Rural Alaska Village Grant (RAVG) program in Section 6408
of the Farm Bill. This change supports the commitment among federal,
state, and local partners to work collaboratively to deliver the RAVG
program in an efficient, streamlined, accountable and impactful way. In
June of 2011, RD, the Environmental Protection Agency (EPA), IHS and
the State of Alaska entered into a Memorandum of Understanding (MOU)
that detailed a new and better way of working with each other and
Alaskan villages to make water and waste infrastructure investments in
rural Alaskan villages where dire sanitation conditions exist in highly
remote communities. Since then, RD has invested more than $220 million
through RAVG to improve infrastructure and the quality of life for
Alaska Natives.
The RAVG program is an excellent example of how partnership among
federal and state entities can change lives in native communities. The
village of Eek, population 474, was an unserved community with no water
or sewer infrastructure. Residents hauled water and utilized
honeybuckets for wastewater. Over a span of four years, RD partnered
with IHS, EPA and the State of Alaska to provide funding for a much-
needed new community-wide water and sanitation system. In 2017, RD
awarded a $3.12 million RAVG grant to complete the last phase of
construction and the project is near completion. The Alaskan Native
Health Consortium (ANTHC) has been another instrumental partner,
managing the project through construction. Because of the phased
approach, many residents have already received first-time water and
sewer service. The new system will have added health benefits as well.
When running water and sewer is introduced to a community, illness
rates drop. In one study of rural Alaskan communities, clinic visits
for respiratory infections declined by 16 percent, skin infections by
20 percent, and gastrointestinal infections by 38 percent after the
introduction of modern sanitation systems. Working collaboratively made
this life-changing project possible.
The new Farm Bill also authorizes RD to refinance certain RD
hospital loans, as well as telecommunications and electric loans. We
understand that these authorities are of interest to tribal borrowers
and we look forward to engaging on this issue in the upcoming USDA Farm
Bill consultations.
In Section 6302 of the Farm Bill, USDA is directed to establish a
technical assistance program to improve tribal entities' access to RD
programs. While RD has technical assistance funding in some specific
program areas and dedicated staff across the country to serve our
customers, this provision provides RD with the opportunity to engage
and serve our native and tribal customers in a more comprehensive and
focused manner. We are committed to providing technical assistance that
addresses the unique challenges faced by tribal governments, tribal
producers, tribal businesses, and tribally designated housing entities
in understanding and strategically accessing RD's wide breadth of
programs and services.
RD is looking forward to the tribal consultations and listening
sessions in the weeks and months ahead to hear from tribes how to best
implement this section of the Farm Bill and to begin building the
framework of a new central RD technical assistance function to be
deployed should funding be appropriated for it.
Conclusion
RD will continue to actively support all tribal nations in their
efforts to improve the quality of life for their members. To do so, we
will partner with other public and private entities to fund projects,
leverage the many tools and authorities Congress has provided, and work
to provide faster, friendlier and more efficient access to RD programs.
The Chairman. Thank you, Ms. Ponti-Lazaruk.
Now we will turn to Lieutenant Governor Thompson.
STATEMENT OF HON. MARK THOMPSON, LIEUTENANT
GOVERNOR, ACOMA PUEBLO; BOARD MEMBER, INDIAN
PUEBLO CULTURAL CENTER
Mr. Thompson. Thank you, Chairman Hoeven, Vice Chairman
Udall, and members of the Committee. I appreciate the
opportunity to provide testimony today before the Senate
Committee on Indian Affairs.
My name is Mark Thompson. I am the First Lieutenant
Governor for the Pueblo of Acoma in New Mexico. I am here today
to represent the Indian Pueblo Cultural Center and Indian
Pueblos Marketing, Inc.
Up until my recent appointment as the Lieutenant Governor
for the Pueblo of Acoma, I served as the Property Development
Director for both of these corporations. I have with me today
the President and CEO of IPCC and IPMI, Mr. Michael Canfield.
Both Indian Pueblos Marketing, Inc. and the Indian Pueblo
Cultural Center are owned and operated by the 19 Pueblos of New
Mexico and are located on trust land in the center of
Albuquerque that once housed the Albuquerque Indian School.
The vision for our organizations located on this property
includes creating unique and successful businesses, providing
professional and economic advancement opportunities for our
workforce, nurturing self-sustainable developments while
providing financial returns to our Pueblo communities, and
promoting and preserving Pueblo arts, culture, and lifestyles.
The Indian Pueblo Cultural Center began operations in 1976,
and has a long, successful history of self-sufficient
operations. Starting from humble beginnings on 11 acres of land
with a handful of employees, we have grown to manage three
corporations and five LLCs generating $45 million in annual
revenue, and providing employment for over 200 employees, of
which 50 percent are Native American.
Our business operations currently include a gas station and
convenience store, an independently owned and operated
Starbucks, two fully leased office buildings, a 108-room
Holiday Inn Express, a wonderful museum and exhibit space,
restaurants, and the Native American Community Academy Charter
School.
We are currently planning a 120,000 square foot office
building, 50,000 square feet of retail space, and have under
construction currently, right now, a new Marriott TownePlace
Suites. I have a copy of the master plan as part of my
testimony.
We have become a major contributor to the State of New
Mexico, the local economy in Albuquerque and Bernalillo County
because of the business we create and our ability to attract
tourism. We are one of the top five most-visited attractions in
New Mexico, hosting approximately 400,000 visitors per year.
I share this information with the Committee because we are
a prime example of the success that tribes can have while
working together and utilizing all the tools you have heard
described today and, in particular, one tool, the BIA Loan
Guaranty Program. This tool is critical to our growth. The type
of growth we have experienced requires a large amount of
capital investment. Property development is not cheap. Our
Pueblo owners have provided support for us, but the enormous
amount of funds required for property development requires that
we partner with financial institutions. This is not always
done. As mentioned, we are on trust land.
It is difficult for us to get loans on trust land; hence
the BIA Loan Guaranty Program collateralizes 90 percent and
allows us to seek financing through these financial
institutions. Over the past 40 years, Indian Pueblos Marketing,
Inc has financed, through the BIA Loan Guaranty Program, $23
million in loans through this program to help develop our
Albuquerque Indian School property which I mentioned.
I am also proud to say that we have never missed a payment
and have not defaulted on any of these loans. I would also like
to mention that we use other tools mentioned here today through
the Department of Commerce, the Economic Development
Administration, State capital outlay funds and other private
funding. The backbone of this has been the BIA Loan Guaranty
Program.
Indian Pueblos Marketing, Inc. and the Indian Pueblos
Cultural Center would not be who we are today without the help
of the BIA Loan Guaranty Program. That has to go without
saying.
I would like to also recognize some of the employees in
this area, Alsace Laframboise and Jerry Rayburn in the
Southwest Zone Office in Albuquerque who have been critical in
administering this loan on behalf of the Federal Government.
I want to thank the Committee for allowing me the
opportunity to testify on behalf of the Cultural Center in
Albuquerque. I stand for questions.
Thank you very much.
[The prepared statement of Mr. Thompson follows:]
Prepared Statement of Hon. Mark Thompson, Lieutenant Governor, Acoma
Pueblo; Board Member, Indian Pueblo Cultural Center
Chairman Hoeven, Vice Chairman Udall, and members of the Committee,
thank you for the opportunity to provide testimony today for the Senate
Committee on Indian Affairs oversight hearing regarding ``Building Out
Indian Country: Tools for Community Development.''
My name is Mark Thompson. I am the 1st Lieutenant Governor for
Acoma Pueblo, located in Acoma, New Mexico. I am here today to
represent the Indian Pueblo Cultural Center (IPCC) and Indian Pueblos
Marketing, Inc (IPMI). Up until my Tribal government appointment in
December 2018, I was the Director of Property Development for both of
these corporations. I have with me today the President and CEO of IPCC
and IPMI, Mr. Michael Canfield.
Both IPMI and IPCC are owned and operated by the 19 Pueblos of New
Mexico, and located on trust land in the heart of Albuquerque that once
housed the old Albuquerque Indian School.
The vision for our organizations located on this property includes
creating unique and successful businesses, providing professional and
economic advancement opportunities for our workforce, nurturing self-
sustainable developments while providing financial returns to our
Pueblo communities, and promoting and preserving Pueblo arts, culture,
and lifestyles.
The Indian Pueblo Cultural Center began operations in 1976, and has
a long history of successful, self-sufficient operations. Starting from
humble beginnings on 11 acres of land with a handful of employees, we
have grown to manage three corporations and five LLCs generating $45
million in annual revenue, and providing employment for over 200
employees, of which 50 percent are Native American. Our business
operations currently include a gas station and convenience store, an
independently owned and operated Starbucks, two fully leased office
buildings, a 108-room Holiday Inn Express, 10,000 square feet of museum
and exhibit space, a Pueblo-inspired restaurant, museum store, a 25,000
square-foot building leased to the Native American Community Academy
Charter School, and 10,000 square feet of leased restaurant space. We
are currently constructing a community plaza, and our new 92-room
Marriott TownePlace Suites Hotel. And we're in the planning phase for a
new 120,000 square-foot office building, 50,000 square feet of
additional retail space, and an Indian Pueblo Opportunity Center that
will support Native entrepreneurs with a business startup incubator and
makerspace focusing on creative and agricultural industries. I have
included a copy of our master plan as part of my testimony that
includes our most recent projects.
We have become a major contributor to our state and local economy
because of the business we create, and because of our ability to
attract tourism. We are one of the top five most-visited attractions in
New Mexico, hosting approximately 400,000 visitors per year.
I share this information with the Committee because we are a prime
example of how successful tribes can be when working together and
utilizing all the tools available to us.
One such tool I would like to focus on today is the BIA Loan
Guaranty, Insurance, and Interest Subsidy Program. The type of growth
we have experienced, including the large amount of property development
we're involved in, has required a significant amount of capital. Our
Pueblo owners have provided us with some financial support, but the
enormous amount of funds required for this scale of growth needs to
come from loans from financial institutions. As I mentioned, we are
located on trust land, which makes collateralization of assets
extremely difficult. Because of this, we were unable to find any banks
willing to provide the financing to fund our plans for growth. We were
fortunate to qualify for the BIA Loan Guaranty Program so our loans
could be collateralized with a 90 percent guaranty. Over the past 40
years IPMI has financed more than $23 million in loans through this
program. These loans made it possible for us to build our convenience
store, Starbucks, the charter school building, and virtually all the
operations I mentioned previously. I'm happy to report we have never
defaulted on any of these loans. In fact, we've never missed a single
payment.
I should also mention that we have utilized other tools to assist
us, like EDA grants and state capital outlay funding. We've also been
fortunate to receive support from private donors, but it is accurate to
say that without the BIA loan guaranty program, IPMI and IPCC would not
be what we have become today.
I would also like to recognize BIA employees from this program,
like Alsace Laframboise and Jerry Rayburn in the Southwest Zone Office,
who have been so helpful administering the guaranty program.
I want to thank the Committee for inviting me to testify this
afternoon, and I am happy to answer any questions.
Attachment
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Lieutenant Governor Thompson.
I agree with you. I have a banking background and the BIA
Loan Guaranty, I think, is, if not the most powerful tool,
certainly one of the most powerful tools I have found in terms
of financing in Indian Country. I could not agree with you more
on that.
We will now have five-minute rounds of questioning. I will
start with Secretary Sweeney.
In terms of economic development tools, obviously there is
an array of tools available to tribes across a number of
agencies. Is there any database or repository either in
Interior or somewhere else in the Federal Government where
someone on the reservation can go and look and see all of the
available tools? Is there some kind of database or something
where they can look at all these tools and figure out which
ones they need and maybe more than one?
Ms. Sweeney. Not to my knowledge, sir.
The Chairman. Is that something you think should be worked
on?
Ms. Sweeney. Absolutely.
The Chairman. It would seem to me that there are some very
good tools. Often you have to use them in conjunction. That
might be something, Staff Director, we should keep in mind. It
seems to me it would be good to have one place where someone
can check and see what all the tools are, what is available.
In previous hearings, we received testimony that there is a
lack of legal information for private businesses on the
reservation. My question is, how is the department working to
help tribes develop commercial codes and attract investment on
the reservation?
Ms. Sweeney. Thank you for your question.
Your observation is correct. Without the codes, businesses
on the reservation cannot finance their inventories from
sellers outside of Indian Country. Members cannot obtain credit
for off-reservation purchases brought onto the reservation
because the rules cannot be enforced in Indian Country.
The National Conference of Commissioners on Uniform State
Laws and a working group of tribal officials drafted a model
Tribal Secured Transaction Act to use as a template for
legislation by tribes. This template is designed to help tribes
facilitate the transactions with outside lenders and
businesses.
It is our goal to provide tribes with all of the necessary
tools to not only work with non-Native corporations, but also
to attract investment and partnerships to Indian Country.
The Chairman. Clearly, this is an area that needs more
work. I strongly encourage you to devote attention to it in
terms of having resources for the tribes that they can call on
to try to develop some of those commercial codes and other
things they need to be entrepreneurial.
Ms. Sweeney. Our Division of Indian Energy and Economic
Development have been working on providing that legal structure
to tribes and working with tribes to develop that legal
structure for the codes. We certainly are open to any
improvements to that process and to provide tribes with
additional access to those tools.
The Chairman. Ms. Ponti-Lazaruk, when Secretary Perdue
announced creation of the Rural Development Innovation Center,
one of his initiatives was the One RD Guarantee Loan. Can you
provide me with an update of how that is going?
Ms. Ponti-Lazaruk. I would be happy to do that.
The One RD Guaranteed Loan rule is actually being
coordinated through the Innovation Center. We held a series of
listening sessions in the fall, one of which was a tribal-
specific listening session. We had a lot of good comments.
For a frame of reference, this is a rule that takes four of
our programs that are guaranteed loan programs and tries to
create a new way of doing business around all four and
standardizes it across them. Right now, we are in the process
of reviewing those comments and the input from all of our
customers and trying to make some decisions on how we might
want to implement the program. We are taking a holistic
approach to this so it is not just about the rule but also
about how we interact with our customers, an online interface
and other ways to get standardized filing.
As we move forward in the months ahead, we will be looking
for external customers to give us feedback on how to develop
that. We would welcome tribal input on that as well.
The Chairman. I think you have real potential with it. I
hope you are able to move forward and have an impact.
Ms. Harris, in your testimony, you discuss re-launching the
Building Native CDFI's Sustainability and Impact Training and
Technical Assistance Series. Can you provide an update on how
the department has discussed this re-launching initiative with
the tribes and what the response has been?
Ms. Harris. Thank you, Mr. Chairman.
We originally discussed the re-launching of the Capacity
Building Initiative in 2017. Since then, we have engaged
roundtables through our traditional outreach at conferences and
through working with a Native CDFI who is leading this effort
on the contracting side to speak with Native CDFIs about what
they are looking for, what type of training would be
appropriate and the modality in which to deliver the training.
So far, since we opened registration three weeks ago, we
have had significant response and interest. We have over 60
groups who have expressed an interest in attending the
training.
The Chairman. Good. As you know, that is one of the things
in our ICEE bill that we tried to really develop and expand,
the CDFIs. We see that as an important source of investment and
funding on the reservations. We are going to try to help you
expand that and do more with that program.
Ms. Harris. Much appreciated. Thank you.
The Chairman. Director Childs, in your testimony, you
referenced the creation of the Office of Policy Analysis and
Development. One of the responsibilities is to conduct data
analysis about American Indian, Alaska Native and Native
Hawaiian businesses and then produce the reports once you have
analyzed the data.
How do you plan to conduct tribal outreach and when should
we expect to see those reports?
Mr. Childs. Thank you for that question.
I am very proud of the Office of Policy Analysis and
Development. MBDA is moving towards doing more in the policy
and data space. We know the need to produce faster and more
reliable data exists, especially in Indian Country.
As far as outreach, I think we have a very good network. As
I mentioned before, we did tribal consultations in fiscal years
2016 and 2017, going out and talking to people. As you know,
the needs are unique depending where you are in the United
States.
More important, I think, is going to some of the big
summits and listening. I just came back from Las Vegas for the
Reservation Economic Summit. I spoke at 9:30 a.m. and there
were over 1,000 people in the room at 9:30 a.m.
When I tell you there was excitement in the room, when they
said Director Childs, if we have a level playing field, we have
no problem with competition. One of the things they look for me
to do is to help reduce some of the barriers they face on
reservations. I take my directorship very importantly and I am
going to do more of that. We are going to listen and we are
going to actually do some positive things.
The Chairman. When do you think that will be out? When do
you expect the report?
Mr. Childs. We are bringing on an economist. I expect us to
start doing the hard, crunching of the numbers this year and
then either late this year or early next year, we should have
the report.
The Chairman. I will tell you this. I like your attitude, I
really do. I get the sense you want to get some things done. I
have no doubt you will. I can just tell. I appreciate that. I
just wanted to commend you on it.
I also have to acknowledge that for the Minority Business
Development Agency at the Department of Commerce, I believe it
is your 50th year anniversary.
Mr. Childs. It is our 50th year anniversary.
The Chairman. Congratulations on that. I think they got the
right guy in there advancing the ball.
Mr. Childs. Thank you very much.
The Chairman. Thank you.
Senator Cortez Masto.
STATEMENT OF HON. CATHERINE CORTEZ MASTO,
U.S. SENATOR FROM NEVADA
Senator Cortez Masto. Thank you, Mr. Chairman.
Let me also echo those comments, Mr. Childs. Also to all of
you, thank you for being here. Thank you for your commitment
and passion to what you are doing to help our tribal
communities and our rural communities in general.
That is one of the things I wanted to talk about. Last
year, Senator Portman and I were able to get enacted the
Council on Rural Community Innovation and Economic Development
through the Farm Bill.
The purpose of this was to enhance the efforts of the
Federal Government to address the needs of rural communities,
including those in Indian Country that we are advocating today.
The Council is comprised of representatives from all of your
larger Federal agencies. I am hoping to see creative and
efficient solutions to help those in our Native communities
with the recommendations and the Rural Smart Community Resource
Guide the Council is tasked with developing.
Let me just ask one of you. Ms. Ponti-Lazaruk, can you
provide the status of implementation of this council? Are you
on it? Who is on it? Can you provide any information about how
it is moving forward?
Ms. Ponti-Lazaruk. I can.
We are at the beginning of implementing all our Farm Bill
provisions. We have had a kick-off meeting to discuss, across
the Federal family, the next steps for the council. We look
forward, in the months ahead, to seeing that roll out.
Senator Cortez Masto. For those of you in Federal agencies,
can I get a commitment that you are committed to the council
and doing everything you can to promote the rural communities
and innovation, particularly when it comes to smart technology?
Ms. Sweeney. Absolutely.
Ms. Harris. Yes, Senator.
Mr. Childs. Yes.
Senator Cortez Masto. Thank you. I appreciate that.
The other thing that was important for me, which you
touched on, was broadband. It is the number one issue in our
tribal communities and our rural communities. It is a
challenge. I cannot tell you the opportunities it brings to
these communities if we are to open that door.
The other legislation that was able to move through the
Farm Bill was the Rural Broadband Integration Working Group. To
me, it is another way for the Federal agencies really to work
together to focus on how we address the barriers, how we bring
forth broadband, and making sure the money is going where it
needs to go.
Let me just ask this. Are any of you aware of this working
group or the implementation of it? Is this still a part of what
is being implemented from the Farm Bill?
Ms. Ponti-Lazaruk. It is still part of what is being
implemented from the Farm Bill. For rural development, we
understand the importance of broadband. I personally understand
it. I came from 15 years at the FCC to join Rural Development
and run the telecommunications program in 2006. I understand
firsthand how important this is.
We look forward to implementing all of the parts of the
Farm Bill associated with broadband and bringing more broadband
to rural and tribal areas.
Senator Cortez Masto. Thank you.
For that and as we bring in broadband and understand where
there are underserved populations, I am from Nevada and I can
tell you if you get even an hour or two hours out, you are off
the grid. Our rural communities and or tribal communities are
challenged as well.
Here is an issue that I am curious if you are looking at
it. I also know that the mapping that is done, particularly as
I said on Senate Commerce, is not accurate. The mapping that
our Federal agency has to identify those underserved
communities or lack of broadband is not accurate in my
communities and I have heard from my colleagues that it is not
accurate in their communities as well.
Is that something that, as you are looking at bringing in
broadband and interconnectivity, you are aware of and how are
you addressing that?
Ms. Ponti-Lazaruk. Thank you for that question. It
highlights something that has been a challenge, I think, for a
lot of years, getting not only data on where broadband is and
is not, but getting that data to stay accurate over time.
I think that is one of the reasons I am very excited that
Secretary Perdue created the Innovation Center. Our analytic
shop is working with the department's analytic shop to find
other data sources that we might use in corroboration with the
FCC data and other data that is out there so we can really
better target our funds.
It will happen over time as we begin to look at those
various data sources but I am hopeful that we will have a
better idea of where the service gaps are and how we can better
serve.
Senator Cortez Masto. I would hope you would tell us as
well what we can do at the Federal level to make sure we are
identifying those areas and addressing those needs. Thank you.
Ms. Ponti-Lazaruk. Absolutely.
Senator Cortez Masto. I know my time is running out, thank
you, Mr. Chairman.
The Chairman. Senator Daines.
STATEMENT OF HON. STEVE DAINES,
U.S. SENATOR FROM MONTANA
Senator Daines. Thank you, Mr. Chairman.
I want to thank the witnesses for being here today.
No doubt providing economic opportunity is essential but I
would argue the first priority of any community has to be
safety. At the top of that list in Indian Country, of course,
is the crisis we have with missing and murdered indigenous
women.
Last week, I introduced a resolution that designates May 5
as the National Day of Awareness for Missing and Murdered
Native Women and Girls. You might ask why May 5th? May 5th was
the birthday of Hanna Harris. Hanna was a 21-year-old mother
and a member of the Northern Cheyenne Tribe, who was murdered
in 2013. She would have turned 27 this May.
In fact, I was honored to walk in and speak at a march we
had in Billings just this past Friday raising awareness for
missing and murdered indigenous women. I literally marched
beside Hanna's mother during that event in Billings. If you
watched The Lead on CNN with Jake Tapper just last night, it
highlighted the fact that the murder rate of Native women is
ten times the national average.
Assistant Secretary Sweeney, this issue demands immediate
and focused attention. I know you are aware of it. We must
continue to raise awareness and bring justice. Communication
and coordination between Federal agencies, law enforcement and
tribes must be improved in order to combat this tragic reality.
I support Savanna's Act, the SURVIVE Act, the Studying
Missing and Murdered Indian Crisis Act. What else do you need
from Congress to help end the crisis of missing and murdered
indigenous women? I just listed three bills that we are working
on.
Ms. Sweeney. Thank you for your question. This is an issue
that I am extremely passionate about.
We have been working internally as my written testimony
reflected, on looking at developing strategies with our Office
of Justice Services within BIA. There is a need to look at cold
cases with respect to Indian Country. What I have heard from
our officers internally is that they have a strong desire to
focus on cold cases to bring families closure, to have that
finality, to find the answers.
We need assistance in removing barriers. Also, when you
look at violent crimes and missing and murdered American Indian
and Alaska Native women and children, we want to partner with
this Committee, we want to partner with other Federal partners
to combat this. There is an education process that needs to
take place.
Senator Daines. As I was chatting with a lot of the
marchers, we were having conversation as we were walking and I
was struck by the fact that if a non-Native woman is missing or
murdered, it oftentimes becomes a great big national story. If
a Native woman is murdered or missing, unfortunately there are
way too many cold cases out there.
I have a couple other questions, so I want to thank you for
your response and your continued focus on this issue. I have
requested a field hearing on this issue in Montana to get folks
on the ground giving input where this crisis is directly
impacting our tribes, destroying families and I look forward to
working with this Committee to make sure this happens in a
timely manner.
I would like to shift gears to discuss Stanley Patrick
Weber, an IHS pediatrician who was recently convicted of
sexually abusing children on the Blackfeet Reservation in
Montana. Mr. Weber's actions and the manner in which IHS
handled him are inexcusable.
I am committed to demanding accountability so that
something like this never, ever happens again. We must ensure
that victims of sexual abuse have access to resources they
need.
Ms. Ponti-Lazaruk, how can the Department of Agriculture
help tribal communities utilize grants to provide services to
victims of sexual assault?
Ms. Ponti-Lazaruk. Thank you for the question.
The USDA Rural Development Program, both loan and grant,
can be used for communities or tribes to build a trauma center
or temporary housing for victims, or to have counseling
services available to them.
They would come to our Community Facilities Program, a
wonderful program, which has a very broad breadth of types of
projects that can be funded there. We would be happy to reach
out.
Senator Daines. Thank you. I am also currently looking at
legislative options to ensure that if, God forbid, another
monster like Stanley Patrick Weber comes along, he would not
receive a dime of taxpayer dollars in government pensions. He
is set up to have this huge pension. That is absolutely wrong.
We are fighting to make sure he never sees a dime of that
pension.
Lastly, this past winter, in Montana we experienced record
cold temperatures. We have seen many issues in Indian Country
as a result. In fact, last month, we had outdated water lines
at Crow Agency. I was speaking with Chairman Not Afraid of the
Crow Tribe. We had pipe freezing and breaking meaning a
complete loss of their stored drinking water supply.
A few days later, Chairman Not Afraid declared a state of
emergency in response to severe flooding from heavy snow packs.
Literally the Crow Tribe has seen flooding, frozen pipes and
they had a fire. Oftentimes associated with colder weather, you
have to find other ways to heat. It happened to the Crow Tribe
in the last six weeks.
Assistant Secretary Sweeney, I have a question for you. How
can DOI ensure the tribes have access to the funds they need to
build or update water systems and infrastructure to help them
become more resilient to natural disasters?
Ms. Sweeney. Thank you for your question.
I would like to point out that BIA has never been funded
for emergency management as a program or for disaster relief.
Any of the funds that BIA provides to tribes to assist during
these emergencies and disasters comes from other programs.
BIA Wildland Fire Fund suppression dollars cannot be used
for any of the all hazard incidents. We continue to monitor
what is happening in the Great Plains. After the series of
storms, we are building a database of the impacts that have
taken place in the Great Plains and across the Country.
We are also sending out a Dear Tribal Leader letter asking
about the impacts of the shutdown. In addition to that, we are
also asking what impacts they are receiving as a result of
these natural disasters, what Federal funds are available to
them, and what Federal funds do not cover the cost of the
disasters.
Senator Daines. I am out of time, well over time, but that
is one issue itself. This is getting back to being more
proactive and making sure we have basic water system that is
more resilient to withstand this.
When it is 35 degrees below in Montana, I am sure it is a
natural disaster but we call that winter time. We need
resilient systems there to accommodate cold temperatures. Thank
you.
Senator Udall. [Presiding.] Senator Smith.
Senator Smith. Thank you very much, Vice Chairman.
Thanks so much to you all for being here to testify today.
I would like to start by asking some questions about
housing. Owning a home, having a safe place to live is really
fundamental to having everything else in your life work. Also,
owning a home is the fundamental way that people build wealth
and retirement savings even.
Yet, lack of housing is a big impediment to building
economic opportunity and economic development in Indian
Country. I was just looking at some data that is really
surprising. About 40 percent of housing in Native areas is
identified as being substandard.
Home ownership in Indian Country is about 33 percent, far
below what you see in the rest of the Country. I certainly
understand there are complicated issues around trust lands and
so forth.
Let me start with you, Assistant Secretary Sweeney. What
can you tell us about the work we are doing and should be doing
to address housing issues in Indian Country?
Ms. Sweeney. As you know, we are not a housing agency. We
must partner with other agencies such as HUD, Agriculture and
the VA in their work with rural development and VA home
ownership.
Senator Smith. I know that you do not do housing yourselves
but yet, how does economic development work if there are not
places for people to live and opportunities for people to build
wealth? Let me ask it this way. How do you see your role in
terms of coming up with strategies across different Federal
agencies on this really important issue?
Ms. Sweeney. Thank you for that question.
Housing is extremely important in creating stable economies
and safe places to live, especially in rural areas, including
Indian Country. As I said earlier, it is important for us to
partner with the agencies whose core mission is to provide
housing opportunities.
What we bring to the table at Indian Affairs is the Indian
Affairs perspective and the advocacy for innovative approaches
to housing. When you look at a community in Alaska that is
looking to different programs to build tiny homes in some of
the most remote areas of the State, we need to be thinking
outside of the box when we look at housing in Indian Country.
Senator Smith. Ms. Harris, would you like to respond?
Ms. Harris. Yes, thank you, Senator.
The benefit of working with Native CDFIs is that these
financial institutions work closely with the tribal government
in Native communities to assess the housing needs. I am happy
to report that our Native CDFIs, through our NACA Program, our
primary funding program for Native CDFIs, have done over $117
million in home improvement and first down payment assistance
programs.
There is a way to partner with financial institutions but,
of course, there is much more need as Assistant Secretary
Sweeney mentioned that would require all the Federal agencies
to work together.
Senator Smith. This could be a strategy for getting at
issues about access to capital and shortages of access to loans
at financial institutions that are even available in Indian
Country?
Ms. Harris. Absolutely.
Senator Smith. Thank you.
Let me shift gears if I could and come to Ms. Ponti-
Lazaruk. This is the issue in which I am interested.
Last Congress, I worked with Senator Udall and Senator
Heitkamp to introduce the Tribal Food and Housing Security Act.
Part of this bill serves as the basis for Section 6302 in the
2018 Farm Bill reauthorization which requires Rural Development
to establish a technical assistance program to improve tribal
entities access to your agency's programs.
You testified that Rural Development is developing tribal
consultations and listening sessions to implement Section 6302
of the Farm Bill but funding is needed. Could you tell me what
is the new Central RD Technical Assistance function you
mentioned in your testimony? Is that different from the
existing TA function?
Ms. Ponti-Lazaruk. It is. Thank you for your question.
The new Technical Assistance Program for tribes will
actually be stood up within in the Innovation Center. I am
really excited, having run several programs in Rural
Development and understanding firsthand through that project
work some of the challenges and the needs for technical
assistance in tribal areas, and to be able to bring all of that
together under the umbrella of the Innovation Center. It will
come under my leadership and I am excited to stand it up.
Senator Smith. Could you just let us know whether your
agency asked for funding to support that function in the fiscal
2020 budget?
Ms. Ponti-Lazaruk. That is an excellent question. I will
have to get back to you on that. I have to check.
Senator Smith. Thank you, Mr. Chair.
Senator Udall. Senator Murkowski.
STATEMENT OF HON. LISA MURKOWSKI,
U.S. SENATOR FROM ALASKA
Senator Murkowski. Thank you, Mr. Chairman.
Thank you all for your testimony. I was not able to hear
many of your comments and I hope I am not repeating but I
appreciate the contribution from each of you.
I do understand that Senator Daines did speak with you
briefly, Secretary Sweeney, about the missing and murdered
indigenous women issue. This is something that we have great
interest in working on with you and your teams.
Just know that whether it is the legislation we introduced
last year and brought back again, Savanna's Act, or the Not
Invisible Act that Senator Cortez Masto and I just introduced,
there is a great deal of interest in working on these issues
with you. We share that with Senator Daines.
I wanted to ask you about some of the capitalization
strategies that you have been working on in Indian Affairs. We
see the good examples in Alaska in some of our communities with
the programs through Indian Affairs that they have been able to
access.
We have projects in Toksook Bay, Hoonah, Anchorage, Bethel,
Kodiak, and many others that have used the Indian Affairs
programs. You have the uniquely tailored Indian Loan Guarantee
Program.
It would be helpful for me to understand, in your view,
what more we can be doing to provide for a level of assistance.
I do note that the fiscal year 2020 budget request proposes to
phase out the Loan Guarantee Program as duplicative.
How is all this working and what more can we be doing to
help you?
Ms. Sweeney. Thank you, Senator Murkowski.
OMB found duplicative guarantee programs across the Federal
Government. Given today's economic climate, it was prudent to
propose consolidating the loan guarantee programs across the
Federal Government.
I want to address that issue. I know it is an issue of
concern raised by many members on this Committee with me
personally. There is no dispute that the Indian Guarantee Loan
Program is successful. We need patient capital in Indian
Country. We need to have the incentives to attract investment
in Indian Country.
However, we are not an economic lending agency with a large
staff whose core mission is to lend to Indian Country. Our core
mission is to uphold that trust responsibility and the treaty
obligations. What we do though is perform the services that
facilitate economic development, whether it is taking land into
trust, doing environmental reviews, providing infrastructure or
feasibility studies.
Again, I want to stress that we are not a financial lending
agency but we want to work with those agencies to ensure that
Indian Country has the access to that capital. When you ask
what we can do, you have heard from the different agencies
sitting at the table, representatives from the Administration,
of the different programs they offer.
Last November, I hosted a roundtable with community
development financial institutions that were Native-owned in
addition to Native-owned banks and credit unions. It was
historic. There were three priorities that came out of that
roundtable.
It was partnering with Native CDFIs to deliver financial
literacy and business training in some or all of our BIE
schools; working with Treasury to ensure that Native financial
institutions continue to build greater and greater capacity,
especially in the area of new market tax credits; and that we,
at Indian Affairs, review our internal systems to shorten the
review and approval process on administrative requirements for
services needed to facilitate economic development where trust
property is involved.
Senator Murkowski. I appreciate that recap. Understanding
the role you have within Indian Affairs as kind of this
oversight, one of the things I worry about, as we do
consolidation, is that the specific Native interests might be
overshadowed by the broader purpose of the funds or programs.
We need to know we have somebody looking specifically to
the needs of Indian Country, looking specifically to the needs
of the Native people within these programs so that they are not
overlooked, not overshadowed, not excluded because of
definitional issues.
You and I know full well how many good, well intentioned
programs Alaska Natives have been not eligible for because of
mere definitions. I do hope that you continue to be aggressive
in this level of oversight, making sure that level of review
and applicability for our Native people is honored.
Ms. Sweeney. Thank you. I appreciate your comments.
I do know that there are definitional issues. One I would
like to raise with you with respect to Alaska is there are
grant programs that include trust lands which are extremely
important, but do not afford Alaska Native entities the
opportunity to take advantage of them.
I am happy to provide that information to the Committee
with the specific types of grants we are talking about.
Senator Murkowski. I look forward to that.
Mr. Chairman, I have one very brief question to ask Ms.
Ponti-Lazaruk if I may.
I want to thank you for what USDA has done to help recently
with the benefit of the Rural Alaska Village Grant Program. I
am going to be going to Eek, Alaska on Saturday. We will be
celebrating the new water and sanitation system in that
village. That came about because USDA partnered with IHS and
EPA and the State of Alaska. This is a really good news event.
I am delighted to be able to participate in that.
I do want to raise, very briefly with you, your scoring
criteria for this new economic activity program. We have heard
some concerns that the scoring criteria may work against rural
Alaska and Alaska Native communities in several different ways.
One of the concerns is that small communities in Alaska may
actually lose out because even though they are very remote and
are not connected, the actual communities are pretty densely
packed. Native villages tend to be community hubs for the
region they are in.
Because of environmental considerations, you have village
members that live in very close proximity to one another which
makes the density seem high. Sometimes there are no health
facilities, no businesses, critical community centers to
connect, so we just do not have those connection points.
Instead of having farms and ranches, which get points in
your scoring system, families in rural Alaska rely on
subsistence, they are out hunting and fishing. We have a
situation where we may actually not score as well given the
nature and yet the need for the broadband infrastructure is
absolutely imperative and cannot be overstated.
I raise that with you. I do now know if it has been brought
to your attention before but would ask you to consider that and
keep our unique situation in mind.
Ms. Ponti-Lazaruk. Thank you, Senator.
As you know, because we met in Alaska at the Rural Alaska
Village Grant Conference, I have been to a number of these
communities and the Alaskan villages. I understand and will
certainly consider that as we move forward, especially into
round two.
Senator Murkowski. Greatly appreciated. Thank you.
Thank you, Mr. Chairman.
Senator Udall. Thank you.
Ms. Sweeney, are there any other Federal programs which
allow tribal members and tribes to collateralize trust land?
That is what the Indian Loan Guarantee Program does. My
understanding is there are not any.
Ms. Sweeney. I would like to ask your question of Jack
Stevens.
Senator Udall. Mr. Stevens, please, the Indian Loan
Guarantee Program allows the collateralization.
Mr. Stevens. David, would you like to address that?
Mr. Johnson. What we do is we take a deed of trust on the
leasehold interests so it is a leasehold deed of trust. That is
the way it is collateralized.
Senator Udall. There is nothing else like that?
Mr. Johnson. I do not know of any other program that uses a
similar process now.
Senator Udall. For OMB to use the term duplication, it
should not apply here in any way because this is the program
that works for the tribes, works for individuals trying to do
development. No other Federal agencies that offer loans have
the specialized knowledge about trust lands that the Department
of the Interior does.
I would not keep repeating the word duplicative because I
do not think it is accurate here. I think it is really unfair
to the tribes and the people who have used this program. You
are going to hear from Lieutenant Governor Thompson who I am
going to ask this question.
Do you agree with what I have just said here? Is there some
other program you could go to that did all these other things?
Mr. Thompson. Vice Chairman Udall and members of the
Committee, I agree with you 100 percent. I was chomping at the
bit to respond to some of that. I appreciate the opportunity.
Senator Udall. Go ahead, you have the chance. Go for it.
Mr. Thompson. I think it is imperative for us to understand
that the Bureau of Indian Affairs has local agencies that every
tribe works with. Those agencies have developed capacity and
capability over decades that understand the nuances of doing
business on Indian land to include leasehold mortgages and
things of this nature, regarding trust land and the legalities
and regulations.
That capacity and capability is housed within the Bureau of
Indian Affairs through those agencies and through programs like
the BIA Loan Guarantee Program. Nobody else does that. That
program helps you get that initial capital investment. Then you
can turn around and leverage that to go to the Department of
Commerce or USDA and use that. Each one of these programs helps
combine to get a project done.
When you have the BIA, Indian Affairs also approves leases
and right-of-ways for development and economic development.
When a tribe can go to the Bureau of Indian Affairs or their
agencies for a lease for development of a road, a utility
right-of-way, a gas line right-of-way, and also tell or ask for
a loan guarantee, then get that loan guarantee and go to the
Department of Commerce or USDA to help complete the project, it
is imperative we understand this program works and there is no
other place we can get that done.
Thank you.
Senator Udall. Lieutenant Governor Thompson, the
President's fiscal year 2020 budget calls for eliminating
funding for the Indian Loan Guarantee Program. I understand
that the Indian Pueblo Cultural Center has used this program to
finance some of its projects. Can you please share with the
Committee how the program has enabled the Center to
successfully develop its businesses?
Mr. Thompson. Thank you, Vice Chairman and members of the
Committee.
The Indian Pueblo Cultural Center has used this program to
finance $23 million worth of development to include one of the
largest Starbucks in the State of New Mexico, to help fund the
Native American Community Academy Charter School.
We talk about community development and economic
development. Economic development is not only about business
development. It is also about education, housing, all of that.
Economic development has all of those aspects.
Indian Pueblo Culture Center has, through the BIA Loan
Guarantee Program, financed $23 million worth of effort to help
continue our development on the Indian School property right in
Albuquerque.
Senator Udall. Yes, and you would not have any place else
to get those kinds of loans?
Mr. Thompson. Vice Chairman Udall and members of the
Committee, no, sir.
Senator Udall. Ms. Sweeney, can we get the name of the
gentleman who gave the answer for the record? He gave the
previous answer. I was asking you the question and Mr. Stevens
stood up but I do not think he answered.
Ms. Sweeney. No, that was David Johnson.
Senator Udall. He specifically answered the question about
the collateralization.
Ms. Sweeney. Yes. I asked Jack earlier about the statement
that Lieutenant Governor Thompson made regarding the difficulty
to get loans and to collateralize loans with Indian Country. I
wanted some clarification because there were some
miscommunications, so my apologies.
Senator Udall. Assistant Secretary Sweeney, one of the
reasons for the Indian Loan Guarantee Program's popularity
among tribal borrowers is its use of trust mortgages to secure
financing. As you know, tribes are typically unable to use
trust lands as collateral which is what we just talked about.
In the USDA's testimony, we learned about that agency's
pilot program for issuing mortgages on trust lands in North
Dakota that will help Native homebuyers. According to DOI's own
Division of Capital Investment, which manages the Indian Loan
Guarantee Program, the Indian Pueblo Cultural Center is a
``beacon of success.'' Lieutenant Governor Thompson just
testified that loans secured through the program have financed
more than $23 million in projects.
Why would the President propose to eliminate a Federal loan
guarantee program that has proven so successful for tribal
entities such as the Indian Pueblo Cultural Center? Do you have
a plan to fill the void if the Indian Loan Guarantee Program is
eliminated? Does DOI have comparable programs in place when we
know they do not?
Ms. Sweeney. Yes, Senator, I do understand that this Loan
Guarantee Program is something that's strongly supported by you
and members of this Committee. The President's budget is the
President's budget and we support that.
I want to stress that we perform services that facilitate
economic development. As I stated earlier to Senator Murkowski,
we perform functions within the Bureau of Indian Affairs like
taking land into trust, like gaming, like doing environmental
reviews that all facilitate economic development in areas like
New Mexico.
With my private sector background and my business and
management background, I have taken a look at the Office of
Indian Energy and Economic Development. I am focused on
realigning their focus and function within that division to run
models and do stress testing on our strategies so that we can
craft a path forward for economic development in Indian Country
rather than spending considerable amounts of time reviewing
loan applications.
There is no dispute that this is a successful program but
that is not our core mission inside of Indian Affairs. There
are other agencies whose core mission is to provide financial
lending.
Senator Udall. As I think you have heard from the
Committee, we strongly support this. You are the top person, a
Senate-approved person, in the Department of the Interior. When
the President comes up with a budget, we understand when he
sends it up, you follow it, but internally, we believe your
role is to advocate for the programs working out there in
Indian Country.
There is a whole process where before the budget shows up
here on the Hill in February. As you know, the department tells
the President what they want in the budget and there is a pass
back and forth. We expect you to be very outspoken internally
about these programs that are working out in Indian Country.
Ms. Harris, Treasury's CDFI Fund funds Native American CDFI
assistance programs. It is doing some great work in Indian
Country. There are four Native CDFIs in New Mexico providing
capital to new and existing businesses and helping Native
people become homeowners.
While the CDFI Fund is an effective tool for economic
growth in tribal communities, I understand it is often
oversubscribed. What is the current demand for the CDFI Fund's
Native American CDFI Assistance Program, financial assistance
and technical assistance awards? Does supply meet demand?
Ms. Harris. Thank you, Senator.
Going off last year's round, I can tell you that supply
does not meet demand. We were oversubscribed by almost half. We
received requests for $34 million in grant applications. We
awarded just a little over $15 million. It is definitely
oversubscribed.
Senator Udall. Do you think that is the case every year,
that there is significant over subscription like that?
Ms. Harris. There is significant over subscription in all
of our programs, including the NACA Program.
Senator Udall. The CDFI Fund has a statutory requirement of
one to one match for all financial assistance grants which
reportedly makes access to Native American CDFI assistance
funds difficult for Native CDFIs who cannot raise private
capital.
That is why Congress, as you know, waived this dollar for
dollar requirement for CDFIs in every fiscal year but fiscal
year 2014. That omission in fiscal year 2014 led to
significantly less capital going out to Indian Country.
Without a waiver, would Native CDFIs be able to access the
funding made available through the CDFI Fund?
Ms. Harris. Without a waiver, as you mentioned, we would
see a significant decline in the number of Native CDFIs that
would have the capacity to access the funds.
Senator Udall. That is a very, very important point. We saw
it in fiscal year 2014 where that happened and it had a
dramatic impact. Do you agree that the impacts would be
devastating to Native communities where access to capital is
already a significant challenge?
Ms. Harris. Yes, I do.
Senator Udall. Thank you.
Assistant Secretary Sweeney, Chaco Canyon is a critically
important area for tribes in the southwest but it is also home
to very active oil and gas development activity. Late last
year, Pueblo leaders met with Associate Deputy Secretary Jim
Cason and Principal Deputy Assistant Secretary John Tahsuda to
discuss ways tribes and the Administration can work together to
protect the Chaco Canyon area.
In that meeting, Mr. Cason invited the tribes to submit a
proposal for an ethnographic study of the region in order to
incorporate Pueblo religious leaders' knowledge of significant
sites to guide responsible oil and gas development. The Pueblos
agreed and submitted their proposal in October 2018. For the
record, that is a very significant development, for Pueblo
leaders to be willing to share this knowledge of sacred sites,
as you probably know well.
My understanding is that there have been meetings between
Interior officials and Pueblos to discuss the parameters of the
study but there are some key sticking points like the one area
it would cover outside the current 10 mile buffer zone.
Can you please provide me with an update on the progress
being made to accommodate the Pueblos' request to cover a wide
area of the Chaco region? We are talking greater Chaco now.
Ms. Sweeney. Understood. Thank you.
As you noted, there have been several meetings with the
Pueblo governors. They were asked to submit a proposal. That
proposal was submitted and at this time, it is my understanding
that BLM and Indian Affairs are currently reviewing those
proposals.
Senator Udall. Are you personally involved in these
discussions?
Ms. Sweeney. I am personally involved in the internal
deliberations, yes.
Senator Udall. As the highest ranking tribal official in
the Administration, I would like you to personally stay on top
of this. It is important that the Pueblos have a voice within
the Administration.
I do not think there are any additional witnesses or an
additional questioner showing up, is that correct on both
sides?
Obviously the record is going to stay open for a couple of
weeks. We are going to submit questions to all of you and we
hope you will answer those in a timely way.
We had a second vote going on and that is why you have seen
Senators going in and out. No disrespect to the witnesses. We
really appreciate everything you have done today.
I am going to gavel this hearing closed. I do not want to
keep everyone waiting.
[Whereupon, at 4:03 p.m., the Committee was adjourned.]
A P P E N D I X
Kiran Ahuja, CEO, Philanthropy Northwest
Chairman Hoeven, Vice Chairman Udall, and Members of the Committee,
thank you for this opportunity to submit testimony regarding the recent
hearing, ``Building out Indian Country: Tools for Community
Development.'' My name is Kiran Ahuja, and I am the CEO of Philanthropy
Northwest.
Founded in 1976 and based in Seattle, Philanthropy Northwest is a
membership network of more than 170 grantmakers in the six-state
Northwest region--Alaska, Idaho, Montana, Oregon, Washington, and
Wyoming--and also works with philanthropies in Hawai`i. Philanthropy
Northwest partners with family funds, foundations, and corporate giving
programs through professional development, networking, research and
publications, public policy, and individualized consulting. Our members
span a wide range of issues, grantmaking practices, size, and scope.
Together, they represent nearly 50 percent of the region's
philanthropic assets.
Philanthropy Northwest's vision is to ensure Northwest communities
have vibrant, healthy futures that honor our past, our people, and our
culture. To accomplish this vision, our work is built around three key
pillars: (1) advancing diversity, equity, and inclusion; (2) promoting
advocacy and engagement; and (3) strengthening the philanthropic
sector. We are committed to expanding the reach and impact of
philanthropy across all communities in our region, and supporting the
well-being and prosperity of Native American, Alaska Native, and Native
Hawaiian communities--whose histories and cultures so deeply shape the
Northwest's identity--is a fundamental value in our approach.
Our testimony addresses the following areas:
Philanthropic work to support Native communities. Members of
our network are actively and intentionally working to support
economic growth in Native communities.
The importance and impact of data. Beyond specific
grantmaking and programmatic activities, we recognize data as
an underlying priority that will support investments toward
strengthening economic and community development. Effective
approaches to build and sustain thriving communities require
strong data about the communities intended to be served by
these resources. Like many partners across the sector,
Philanthropy Northwest views data as essential, for our own
work and for policy makers.
Why the 2020 Census matters. We see the 2020 Census as a
critical opportunity to build accurate and reliable data that
will guide investments and programs to support our region's
most under-resourced communities, including Native communities.
\1\ The census plays a foundational role in the visibility of
Native communities' needs and the equitable distribution of
resources. For this reason, we believe the importance of a
robust and accurate 2020 Census must be part of this
committee's consideration of the tools for economic and
community development in Indian Country.
Philanthropic Work to Support Native Communities
Federal resources and programs have an important role in supporting
economic and community development in Native communities, and while the
philanthropic sector cannot fill this gap, it too is a necessary
partner and stakeholder in collaborative solutions. First Nations
Development Institute, which works to improve economic conditions for
Native communities through direct financial grants, technical
assistance and training, and advocacy and policy, reported national
data from 2006-2014 that $107 million in grants serving Native causes
went toward economic and community development-related activities. \2\
In the Northwest, a vital responsibility of our philanthropic
network is to strengthen its relationship with Native communities. Our
analysis of philanthropic funding in 2014, the last year for which we
have published data, showed that funding to Alaska Native and Native
American communities in our six-state region was nearly five times more
likely than grantmaking nationwide to support Native activities,
issues, and communities ($22.6 million regionally versus $91.6 million
nationally). \3\
One Philanthropy Northwest member, Northwest Area Foundation
(NWAF), has a commitment to place 40 percent of their grant dollars
with Native-led nonprofit partners. \4\ Serving the states of Idaho,
Iowa, Minnesota, Montana, North Dakota, Oregon, South Dakota, and
Washington, and the 75 Native nations that share this geography, \5\
NWAF provides tangible examples of how grantmaking supports economic
and community development in Indian Country. NWAF currently provides
$10 million in grants to 18 Native community development financial
institutions (CDFIs), private organizations managed by Native community
members to provide local businesses with training, education, and
financial support. NWAF also has three mission investments in Native
CDFIs totaling nearly $2 million that are program-related investments,
which the foundation defines as below-market-rate investments that
prioritize impact over financial return.
One CDFI is located in Eastern Washington on the
Confederated Tribes of the Colville Reservation. \6\ Capital
and education provided to entrepreneurs has led to the creation
of multiple profitable businesses owned by residents, such as a
healthy foods restaurant and a daycare center, which likely
would not have existed without the CDFI or philanthropic
support behind it. \7\
The state-recognized Little Shell Tribe of Chippewa Indians
in Montana needed capital to develop a limestone quarry to help
the Little Shell achieve financial self-sufficiency. However,
the tribe's lack of federal recognition prevented access to
federal funding. A regional CDFI, the Native American
Development Corporation, helped them locate a finance partner
to launch the project. \8\ The Native American Development
Corporation has assisted over 20 Native communities in the
Dakotas, Montana, and Wyoming, and partners with federal
government agencies and the Northwest Area Foundation. \9\
A CDFI facilitator and major grantee, First Nations Oweesta
Corporation (Oweesta), lends and relends to CDFIs, including
through a growing capital pool of $10 million supported by $1
million in seed funding from NWAF. Additionally, a $500,000
grant from NWAF further supports Oweesta's lending to smaller
CDFIs. According to Oweesta, the relending will lead to 3,000
new jobs. \10\
In addition to grantmaking, philanthropy also serves a valuable
role as a convener to explore issues, facilitate dialogue, and promote
partnerships. One area where Philanthropy Northwest and its members are
deepening our work is with respect to Opportunity Zones, and
specifically understanding how this new community investment tool can
support future wealth building for Native communities. The six
Northwest states have 328 Opportunity Zones. We know that rural and
tribal areas face a built-in disadvantage to attracting Opportunity
Zone dollars when up against more urban centers that offer a dense
array of large, profitable real estate projects, and where investors
are already engaged. Rural and tribal places are forming regional
collaborations to compete, and two notable collaborations are in the
Northwest:
The Emerald Coast Opportunity Zone is a collaboration
between economic development leaders on the Olympic Peninsula
of Washington state representing five tribes (Jamestown
S'Klallam, Lower Elwha Klallam, Makah, Quileute, and Hoh), four
cities, two counties, and two port authorities. \11\
The North Star Opportunity Zone is a collaboration
spearheaded by the Confederated Tribes of the Colville
Reservation in eastern Washington state. \12\
With members of our network and partners from Native communities,
we are convening dialogue and deepening proficiency about the role
philanthropy might play in supporting rural and tribal Opportunity
Zones.
These examples offer a glimpse into how philanthropy has an
important role in this discussion, even as we recognize that
philanthropy can and should be doing more to support Native leadership
in addressing economic challenges facing Native communities. Later this
year, Philanthropy Northwest will release a report on Native giving
that will highlight examples and best practices that Native communities
believe are important to replicate to build out strong partnerships.
The report will be a resource for driving more philanthropic resources
to Native communities, and highlighting the appropriate ways non-Native
people and institutions can support efforts that serve Native people
and center their leadership.
The Importance and Impact of Data
Policy and funding decisions are built upon data. However, it is
widely known that accurate and reliable data at all levels--from
national to local--can be difficult to obtain regarding Native
communities. Limited data impacts the availability of resources,
especially to tribes. For example, in the child welfare context,
funding for Title IV-E Foster Care and Adoption Assistance goes to
tribes that have the financial and technical infrastructure in place to
meet extensive data reporting requirements. \13\ Contrary to the
misconception that many tribal governments would be able to support
this endeavor through casino revenues, many tribes without large gaming
enterprises lack resources for these data operations. \14\ Limited data
also hinder the ability to identify unmet needs in the Native
community. \15\ For example, data have shown the average philanthropic
grant for Native American causes and organizations shrunk from almost
$160,000 in 2006 to well below $120,000 in 2014, \16\ and less than one
percent of total grantmaking goes to these causes, which can be
partially attributable to insufficient information and evidence
available to grantmakers. \17\
Data directly inform effective decisionmaking, which in turn leads
to promising outcomes, as an example from one of our members, Yakima
Valley Community Foundation (YVCF) in Yakima, WA, illustrates from
their partnership with the tribal community. In 2013, YVCF invested
$15,000 into the local collaborative Ttawaxt, which used community-
based strategies to collect data to understand factors contributing to
disproportionate infant mortality rates among Native American infants
in Yakima County. Community members were trained in ethical research
processes and data collection methods, and they were paid to gather
both quantitative and qualitative information. \18\ The analysis led to
establishing a strong foundation to build upon, interventions, and data
used to provide education to the professional community. \19\ YVCF
entered back as a funding partner to Ttawaxt in 2017 and awarded the
collaborative $150,000, which was then used to leverage and gain
support from many other funders. Together this funding has allowed
Ttawaxt to fine tune their community-driven services, build capacity,
pay tribal members to implement work, and gain meaningful
sustainability in the community, and now Ttawaxt is beginning to move
toward their own non-profit. \20\
Why the 2020 Census Matters
Data from many sources are important to analyzing, anticipating,
and responding to needs in Native communities. There is no source of
data as broadly consequential as the census. The census, which occurs
once every ten years, is a constitutionally mandated count of the total
number of people living in the United States. Decennial census data are
used to accurately apportion $800 billion in federal funding, create an
equal distribution of political representation, and inform decisions
made by organizations across all sectors that use the data in their
business or policy decisions. \21\
The goal is for every person to complete the census by Internet,
mail, or phone. However, certain populations have historically been
undercounted in the census, such as young children, those with low
Internet access, people in rural areas, lower-income groups, and people
of color. \22\ Around a quarter of the Native population lives in areas
identified as hard-to-count. Among other factors, this is due to a high
poverty rate, lower than average educational attainment, a much younger
than average population, a high proportion of renters versus
homeowners, and a substantial rate of complex living situations, \23\
such as multi-family or extended family homes. \24\
Stark numbers reflect the significant risk of a census undercount
in Native communities:
For the 22 percent of American Indians and Alaska Natives
who live on reservations,25 the 2010 Census yielded an
undercount by nearly five percent, over twice as high as the
second-most undercounted population. \26\
The 2020 Census will feature a new Internet response method,
but almost half of those on reservations with a computer do not
have a high-speed Internet subscription. High-speed Internet
access among those who have a computer lags overall across the
Native population, at around two-thirds, in contrast to 82
percent of the rest of the population. \27\
People who are homeless can be very difficult to accurately
count in the census. \28\ While American Indians and Alaska
Natives represent less than two percent of the country's
population, they comprise four percent of the sheltered
homeless population and five percent of sheltered homeless
families. \29\ In Hawai`i, which has the highest rate of
homelessness per capita at 487 per 100,000 people, \30\ one-
third of the homeless population is Native Hawaiian. \31\
Many federal programs that benefit Native communities rely in whole
or in part on census-derived data for allocation formulas. These
include, but are not limited to, Title I grants to local education
agencies ($14 billion in FY2015), Head Start ($8.3 billion), and Native
American employment and training ($58 million). \32\ Expansion funds
for Head Start are distributed based on the number of young children in
poverty in a particular area. This especially affects funding to Native
communities, where nearly one-third of the population are children,
compared to 24 percent in the general population. \33\ Many health
programs also rely on census data. This includes those that solely
support Native communities, such as the Indian Health Service (nearly
$5 billion in FY2015) and the Urban Indian Health Program ($41
million), as well as programs with high Native enrollment, such as
Medicaid ($312 billion) or other public insurance. \34\ Housing-related
services are also impacted by census data, such as the Indian Housing
Block Grant ($650 million in FY2015) and Indian Community Development
Block Grants ($70 million). \35\
Census undercounting results in Native communities being
inaccurately and insufficiently represented in decisionmaking. At the
level of federal resources, this results in clear costs to health,
security, and educational and employment opportunities for Native
peoples across the country, weakening the infrastructure to support and
sustain strong economies. For policy makers and philanthropy alike, an
incomplete census count misguides us in evaluating needs, setting
priorities, and measuring the outcomes of investments and programs.
Conclusion
It is a priority of Philanthropy Northwest to support Native
communities across our region, and we are committed to not only
deepening our own work on this front, but also to working with this
committee as a partner to promote communities' capacity to build
healthy and sustainable economies. Through our network's own vested
interest and familiarity with this issue, we encourage this committee
to consider the importance of robust data, including and especially
through the 2020 Census, as a fundamental tool to promote economic and
community development in Indian Country.
We look forward to continuing to be a resource to this committee.
Our Native giving report will be released this fall, and we would
welcome an opportunity to present at a forthcoming hearing.
ENDNOTES
\1\ See Philanthropy Northwest. ``2020 Census.'' Accessed April
23, 2019. https://philanthropynw.org/2020-census.
\2\ First Nations Development Institute. ``Growing Inequity: Large
Foundation Giving to Native American Organizations and Causes, 2006-
2014.'' 2018: 33. https://www.firstnations.org/wp-content/uploads/
publication-attachments/Growing%20_Inequity_(WEB).pdf.
\3\ Neroulias Gupte, Nicole. ``Trends in Northwest Giving 2017.''
Philanthropy Northwest, March 2017: 7. https://philanthropynw.org/
sites/default/files/files/
news/Trends%20in%20Northwest%20Giving%202017.pdf. An updated Trends
publication will be released this year.
\4\ Northwest Area Foundation. ``Native-Led Organizations:
Advancing economic, social, and cultural prosperity.'' Accessed April
17, 2019. https://www.nwaf.org/native-led-organizations/.
\5\ Northwest Area Foundation. ``About the Northwest Area
Foundation.'' Accessed April 17, 2019. https://www.nwaf.org/about/.
\6\ Walker, Kevin. ``Equity for Native American Communities: Using
Mission Investments Alongside Grants.'' Stanford Social Innovation
Review, April 1, 2019.
https://ssir.org/articles/entry/
equity_for_native_american_communities_
using_mission_investments_alongside_grants?utm_source=Mailchimp&utm_
medium=email&utm_campaign=kw_ssir_promo&utm_source=All+Contacts
&utm_campaign=1cb3aed54f-kw_ssir_promo&utm_medium=email
&utm_term=0_169cbd0710-1cb3aed54f-428429945#.
\7\ Scott, Clay. ``Northwest Native Development Fund: How Native
CDFI Partnership with National Banks Can Respond to Native Communities'
Needs for Capital and Culture.'' Northwest Area Foundation. Accessed
April 17, 2019. https://www.nwaf.org/nndf/.
\8\ Scott, Clay. ``Native American Development Corporation: How
Native CDFIs Can Lead to Investment and Growth that Literally Helps Put
Tribes on the Map.'' Northwest Area Foundation. Accessed April 17,
2019. https://www.nwaf.org/nadc/.
\9\ Native American Development Corporation. ``About NADC.''
Accessed April 17, 2019. http://www.nadc-nabn.org/about-nadc/.
\10\ Walker, ``Equity for Native American Communities.''
\11\ Kuh, Brian. ``An Opportunity for Jefferson County.'' Business
Insider (The Chamber of Jefferson County Newsletter), November 2018: 6.
https://chambermaster.blob.core.windows.net/userfiles/UserFiles/
chambers/658/CMS/JCCC_BusinessInsider_November2018_FINAL.pdf;
McMicking, Jeannie. ``Inslee focuses on maritime industry during tour
of Peninsula.'' Peninsula Daily News, June 8, 2018. http://
www.peninsuladailynews.com/news/inslee-focuses-on-maritime-industry-
during-tour-of-peninsula/.
\12\ See North Star Opportunity Zones. ``Homepage.'' Accessed April
24, 2019. http://northstaroz.com/.
\13\ See generally Marcynyszyn, Lyscha, Hildegarde Ayer, and Peter
Pecora. ``American Indian Title IV-E Application Planning Process:
Tribal Progress, Challenges, and Recommendations.'' Casey Family
Programs. September 2012. https://caseyfamilypro-wpengine.netdna-
ssl.com/media/AmericanIndianTitleIVe.pdf.
\14\ Chapman, Michael, David Cournoyer, and Wilma Mankiller.
``Context is Everything: Reflections on Strengthening Partnerships
Between the Philanthropic Community and Native Americans.'' One Fire
Development, Inc. July 14, 2016: 10. http://
nativephilanthropy.issuelab.org/resource/context-is-everything-
reflections-on-strengthening-partnerships-between-the-philanthropic-
community-and-native-americans.html; See Marcynyszyn, Ayer, and Pecora,
``American Indian Title IV-E Application Planning Process.''
\15\ Chapman, Cournoyer, and Mankiller, ``Context is Everything,''
39.
\16\ First Nations Development Institute. ``Growing Inequity:
Large Foundation Giving to Native American Organizations and Causes,
2006-2014.'' 2018: 31. https://www.firstnations.org/wp-content/uploads/
publication-attachments/Growing%20_Inequity_(WEB).pdf.
\17\ See Chapman, Cournoyer, and Mankiller, ``Context is
Everything,'' 3.
\18\ Group Health Foundation. ``Tt waxt.'' Accessed April 24,
2019: 3. https://grouphealthfoundation.org/wp-content/uploads/2018/09/
Tta%CC%81waxtJourney-MemorialFoundation_Presentation.pdf.
\19\ Ibid, 4.
\20\ Ibid, 5.
\21\ Philanthropy Northwest. ``2020 Census.''
\22\ City University of New York Mapping Center. ``HTC 2020.''
Accessed April 22, 2019. https://www.censushardtocountmaps2020.us/.
\23\ The Leadership Conference Education Fund. ``Will You Count?
American Indians and Alaska Natives in the 2020 Census.'' April 17,
2018: 1. https://censuscounts.org/wp-content/uploads/2019/03/Fact-
Sheet-AIAN-HTC.pdf.
\24\ Running Strong for American Indian Youth. ``The Poverty
Cycle.'' Accessed April 17, 2019. http://indianyouth.org/american-
indian-life/poverty-cycle.
\25\ Yurth, Cindy. ``Census: Native Count Jumps by 27 Percent.''
Navajo Times, January 26, 2012. https://navajotimes.com/news/2012/0112/
012612census.php.
\26\ National Congress of American Indians. ``Census.'' Accessed
April 17, 2019. http://www.ncai.org/policy-issues/economic-development-
commerce/census.
\27\ Wang, Hansi Lo. ``Native Americans On Tribal Land Are 'The
Least Connected' To High-Speed Internet.'' NPR, December 6, 2018.
https://www.npr.org/2018/12/06/673364305/native-americans-on-tribal-
land-
are-the-least-connected-to-high-speed-Internet.
\28\ The Leadership Conference Education Fund. ``Will You Count?
People Experiencing Homelessness in the 2020 Census.'' July 1, 2018: 1-
2. http://civilrightsdocs.info/pdf/census/2020/People-Experiencing-
Homelessness-HTC.pdf.
\29\ United States Interagency Council on Homelessness. ``Expert
Panel on Homelessness among American Indians, Alaska Natives, and
Native Hawaiians.'' September 27, 2012: 5. https://www.usich.gov/
resources/uploads/asset
_library/Expert_Panel_on_Homelessness_among_American_Indians%2C
_Alaska_Natives%2C_and_Native_Hawaiians.pdf.
\30\ Bussewitz, Cathy. ``Hawaii struggles to deal with rising rate
of homelessness.'' Los Angeles Times, November 15, 2015.
https://www.latimes.com/nation/la-adna-hawaii-homeless-20151115-
story.html.
\31\ The Leadership Conference Education Fund. ``Will You Count?
Asian Americans and Native Hawaiians and Pacific Islanders (NHPIs) in
the 2020 Census.'' April 17, 2018: 2. http://civilrightsdocs.info/pdf/
census/2020/Fact-Sheet-AA-NHPI-HTC.pdf.
\32\ The Leadership Conference Education Fund, ``American Indians
and Alaska Natives,'' 2.
\33\ National Congress of American Indians. ``Demographics.''
Accessed April 17, 2019. http://www.ncai.org/about-tribes/demographics.
\34\ The Leadership Conference Education Fund, ``American Indians
and Alaska Natives,'' 2-3.
\35\ Ibid, 3.
______
Prepared Statement of the United South and Eastern Tribes Sovereignty
Protection Fund USET
The United South and Eastern Tribes Sovereignty Protection Fund
(USET SPF) is pleased to provide the Senate Committee on Indian Affairs
with testimony for the record of the hearing on, ``Building out Indian
Country: Tools for Community Development.'' Rebuilding of our Tribal
Nations includes rebuilding of our Tribal economies as a core
foundation of healthy and productive communities. Lack of parity with
other units of government and limited access to capital often serve as
our greatest challenges and interfere with our ability to pursue
economic development opportunities, which has a ripple effect
throughout Tribal communities. USET SPF supports current legislative
and executive efforts to advance economic development in Indian Country
in a way that is respectful of the federal trust obligation and our
inherent sovereignty. Below we address many of the issues and bills
raised during the hearing, as well as some major USET SPF priorities
that were absent.
USET SPF is a non-profit, inter-tribal organization representing 27
federally recognized Tribal Nations from Texas across to Florida and up
to Maine. \1\ USET SPF is dedicated to enhancing the development of
federally recognized Tribal Nations, to improving the capabilities of
Tribal governments, and assisting USET SPF Member Tribal Nations in
dealing effectively with public policy issues and in serving the broad
needs of Indian people. This includes advocating for the full exercise
of inherent Tribal sovereignty.
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\1\ USET SPF member Tribal Nations include: Alabama-Coushatta Tribe
of Texas (TX), Aroostook Band of Micmac Indians (ME), Catawba Indian
Nation (SC), Cayuga Nation (NY), Chitimacha Tribe of Louisiana (LA),
Coushatta Tribe of Louisiana (LA), Eastern Band of Cherokee Indians
(NC), Houlton Band of Maliseet Indians (ME), Jena Band of Choctaw
Indians (LA), Mashantucket Pequot Indian Tribe (CT), Mashpee Wampanoag
Tribe (MA), Miccosukee Tribe of Indians of Florida (FL), Mississippi
Band of Choctaw Indians (MS), Mohegan Tribe of Indians of Connecticut
(CT), Narragansett Indian Tribe (RI), Oneida Indian Nation (NY),
Pamunkey Indian Tribe (VA), Passamaquoddy Tribe at Indian Township
(ME), Passamaquoddy Tribe at Pleasant Point (ME), Penobscot Indian
Nation (ME), Poarch Band of Creek Indians (AL), Saint Regis Mohawk
Tribe (NY), Seminole Tribe of Florida (FL), Seneca Nation of Indians
(NY), Shinnecock Indian Nation (NY), Tunica-Biloxi Tribe of Louisiana
(LA), and the Wampanoag Tribe of Gay Head (Aquinnah) (MA).
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S. 212, The Indian Community Economic Enhancement Act
USET SPF continues to support many of the provisions within the
Indian Community Economic Enhancement Act (ICEE). The permanent waiver
of matching funds for Native Community Development Financial
Institutions (CDFIs) is long overdue and a welcome provision in the
bill. In addition, we welcome the opportunity for Native CDFIs to
access grants through the Native American Programs Act that would
provide CDFIs with the opportunity for development and maintenance, and
allow them to provide assistance to Tribal Nations in the development
of Tribal law and court systems for the purposes of regulating
commerce, as well as Tribal master plans for economic development and
infrastructure.
We also offer our support for the elevation of the Director of the
Office of Native American Business Development. Providing direct access
from this position to the Secretary of Commerce will assist in the
removal of some of the barriers described in the ``Findings'' section
of the bill.
Further, USET SPF is supportive of amendments to the Buy Indian Act
that would require the Bureau of Indian Affairs and the Indian Health
Service to certify that procurement from Indian businesses is not
practicable before purchasing outside Indian Country. We also look
forward to the issuance of a biannual report from the Departments of
Health and Human Services and Interior regarding the implementation of
the Buy Indian Act.
USET SPF believes that this bill provides a variety of much needed
change in policy and law. Additionally, we continue to note that there
are a number of opportunities for improvement within the bill as
introduced. These include:
Section 2. Findings.
While the Findings section as drafted does describe many
existing barriers to economic development in Indian Country,
USET SPF would like to see references to the deep inequities
Tribal Nations face under the U.S. Tax Code strengthened.
Through inequities in the tax code as well as state dual
taxation, revenue generated within Indian Country continues to
be taken outside our borders or otherwise falls victim to a
lack of parity. Moreover, Tribal governments continue to lack
many of the same benefits and flexibility offered to other
units of government under the tax code. We strongly encourage
the addition of stronger language within the Findings section
that acknowledges and seeks to lift these deep inequities.
This is particularly important, given the failure of Congress
to include any Tribal priorities in the Tax Cuts and Jobs Act,
despite consistent advocacy from Tribal Nations across the
country. It is unacceptable that this once-in-a-generation
legislation did not include these critical, non-controversial
Tribal priorities. Tribal Nations across the country, including
USET SPF member Tribal Nations, are simply seeking parity as
governments and economic opportunity for their citizens under
the U.S. tax code.
Section 3. Native American Business Development, Trade
Promotion, and Tourism Act.
While USET SPF supports much of the language in this section,
including the Indian Economic Development Feasibility Study, we
note the absence of placeholder language found in a previous
version of the bill. Repeal of the ``essential government
function'' test in the Tribal issuance of tax-exempt bonds
would be critical step forward in the pursuit of parity within
the tax code for Tribal Nations. Currently, Tribal Nations are
the only governments that are limited to using tax-exempt bond
financing for ``essential government functions.'' The IRS has
interpreted this standard to exclude Tribal economic
development activities even though state and local governments
routinely use tax-exempt financing for development projects.
This limitation on Tribal Nations greatly inhibits
infrastructure deployment and economic growth. Although we
recognize that the addition of taxation provisions could result
in jurisdictional issues, USET SPF asks that language repealing
the ``essential government function'' test be added to the
bill.
S. 294, The Native American Business Incubators Program Act
The Native American Business Incubators Program Act would establish
a grant program to provide financial assistance for the establishment
and operation of business incubators serving Tribal communities within
the Department of the Interior. The growth and diversification of
Native businesses within Indian Country is critical to economic
sovereignty, self-determination, and Nation rebuilding. We agree that
Native business owners face unique and greater barriers to economic
success than many of their peers. USET SPF strongly supports this
legislation as an opportunity to create jobs and strengthen Tribal
economies, particularly in the USET SPF region. We further support the
necessary authorization of funding for this program and appreciate
attempts to ensure that the Act is not implemented at the expense of
other equally necessary programs at Interior. We note, however, that
opportunities under this provision come in the form of grants. We
continue to ask that consideration be given to further supporting
Tribal sovereignty and self-determination by providing the opportunity
to receive these dollars through P.L. 93-638 contacts or compacts.
Urgent Need for Tax Parity
Any conversation about community and economic development in Indian
Country must necessarily include tax parity for Tribal Nations. As we
note above, through inequities in the tax code as well as state dual
taxation, revenue generated within Indian Country continues to be taken
outside its borders or otherwise falls victim to a lack of parity.
Despite recent national tax reform, Tribal governments continue to lack
many of the same benefits and flexibility offered to other units of
government under the tax code.
On December 20, 2017, Congress passed H.R. 1, the Tax Cuts and Jobs
Act, legislation reforming the U.S. tax code. USET SPF continues to be
deeply disappointed that after years of advocacy, the legislation did
not contain a single Tribal priority. Tribal Nations had spent years
advocating for changes to the tax code that would provide for tax
treatment reflective of our governmental status and enhance economic
development in Indian Country. Legislation providing for these changes
was introduced: S. 2012, The Tribal Economic Assistance Act, introduced
by Senator John Hoeven; and S. 1935/H.R. 3138, The Tribal Tax and
Investment Reform Act, introduced by Senator Jerry Moran and
Representatives Lynn Jenkins and Ron Kind.
Tribal priorities for this legislation were simple--provisions that
would offer governmental parity and economic development for Tribal
Nations under the tax code. And yet, these critical changes are absent
in the Tax Cuts and Jobs Act. USET SPF calls upon Congress and the
Administration to prioritize tax reform for Tribal Nations in future
legislation, including tax extenders and any upcoming infrastructure
package.
In addition, as USET SPF has noted many times before, dual taxation
hinders Tribal Nations from achieving our own revenue generating
potential. Although Tribal Nations have authority to tax noncitizens
doing business in Indian Country, when other jurisdictions can tax
those same noncitizens for the same transactions, Tribal Nations must
lower their taxes to keep overall pricing at rates the market can bear
or forgo levying a tax at all. The application of an outside
government's tax often makes the Tribal tax economically infeasible.
Dual taxation undercuts the ability of Tribal Nations to offer tax
incentives to encourage non-Indian business entities onto the
reservation to create jobs and stimulate the Tribal economy. As long as
outside governments tax non- Indian businesses on the reservation, even
if a Tribal government offers complete Tribal tax immunity to attract a
new non-Indian business to the reservation, that business is subject to
the same state tax rate that is applicable offreservation. As a matter
of economic fairness, USET SPF asks that Congress and the
Administration work with Tribal Nations to support and advance
initiatives that would bring certainty in tax jurisdiction to Tribal
lands by confirming the exclusive authority of Tribal governments to
assess taxes on all economic activities occurring within their borders.
Restoration of Tribal Homelands
It is similarly impossible to discuss Tribal community development
without acknowledging the critical importance of Tribal homelands
restoration. In response to federal policies that stripped us of our
land base, the Department of the Interior (DOI) has, for nearly 85
years, restored Tribal lands through trust acquisitions to enable
Tribal Nations to build schools, health clinics, hospitals, housing,
and provide other essential services to Tribal citizens. Over this
period, DOI has approved trust acquisitions for approximately 5 million
acres of former Tribal homelands, which represents only a small
fraction of the more than 100 million acres lost through Federal
policies of removal, allotment, and assimilation.
USET SPF Tribal Nations continue to work to reacquire our
homelands, which are fundamental to our existence as sovereign
governments and our ability to thrive as vibrant, healthy, self-
sufficient communities. And as our partner in the trust relationship,
it is incumbent upon the federal government to prioritize the
restoration of our land bases. The federal government's objective in
the trust responsibility and obligations to our Nations must be to
support healthy and sustainable self-determining Tribal governments,
which fundamentally includes the restoration of lands to all federally-
recognized Tribal Nations, as well as the legal defense of these land
acquisitions.
No Tribal Nation should remain landless. All Tribal Nations,
whatever their historical circumstances, need and deserve a stable,
sufficient land base--a homeland--to support robust Tribal self-
government, cultural preservation and economic development. The Federal
Government should ensure every Tribal Nation has the opportunity to
restore its homelands, regardless of the concerns of other units of
government, private citizens, or other interests. This is a necessary
function of the U.S. government in delivering upon the trust
responsibility and obligations to Tribal Nations.
Regaining a land base is essential to the exercise of Tribal self-
government. When the federal government holds land in trust for a
Tribal Nation, the Tribal Nation is able to exercise jurisdiction over
the land, including over individuals' actions and over taxation. This
jurisdiction allows the Tribal Nation to protect its people and to
generate economic growth, which in turn encourages the flourishing of
the Tribal Nation's cultural practices. Jurisdiction over territory is
a bedrock principle of sovereignty, and Tribal Nations must exercise
such jurisdiction in order to fully implement the inherent sovereignty
they possess. Just as states exercise jurisdiction over their land,
Tribal Nations must also exercise jurisdiction, thereby promoting
government fairness and parity between state governments and Tribal
Nation governments.
As long as trust lands remain elusive for some Tribal Nations and
the status of lands held in trust for others is called into question,
opportunities for economic and community development will be hindered
across Indian Country. USET SPF continues to call for the immediate
passage of a fix to the decision in Carcieri v. Salazar that contains
the two features necessary to restore parity to the land-into-trust
process: (1) a reaffirmation of the status of current trust lands; and
(2) confirmation that the Secretary has authority to take land into
trust for all federally recognized Tribal Nations.
Native Community Development Financial Institutions (CDFI)
Utilizing 50 years of technical assistance expertise and the unique
opportunities available to our service area, the USET CDFI has been
working to build the first regional CDFI with a focus on lending for
Tribal Nation enterprise economic development projects. Through an
initial award from the Department of Treasury's CDFI Fund, USET CDFI
has been working to capitalize a loan fund, establish necessary
oversight of the fund through the creation of a Board of Directors, and
draft guidance documents and loan policies vital to execute lending
activity.
The initial award through the CDFI Fund's Native American CDFI
Assistance (NACA) Program has been the main resource to fund this
activity, and without this financial assistance, the establishment of
CDFIs in Indian Country would be severely diminished. Essential to that
financial assistance is the waiver of the $1 to $1 match required for
recipients, especially for new, emerging CDFIs like the USET CDFI.
Waiving this match requirement reduces the administrative burden for
emerging CDFIs to focus more on providing technical assistance and
financial services to disadvantaged and underbanked communities and
individuals. Permanently waiving this requirement, as the ICEE bill
does, will continue to expand the CDFI model throughout Indian Country
to ensure all Tribal citizens have access to fair access to credit,
capital, and financial services.
USET SPF also supports the continued and expanded development of
the CDFI Fund's capacity building initiative for Native CDFIs. The
technical assistance and services provided through this initiative
would have greatly assisted the development of the USET CDFI and led to
faster deployment of lending capital.
Office of Indian Energy and Economic Development
Indian Affairs Loan Guarantee Program
USET SPF encourages the continuation of the Indian Affairs Loan
Guarantee Program, facilitated by the Office of Indian Energy and
Economic Development, Division of Capital Investment. USET SPF member
Tribal Nations have a long history of utilizing this uniquely situated
and advantageous program. The program has led to innovative community
economic development activity having a significant impact in Tribal
communities.
USET SPF strongly disagrees that this program is duplicative of any
other loan guarantee program offered throughout the federal family. It
is the only program to facilitate loan financing for borrowers in
Indian Country and continues to have one of the lowest default rates
throughout all federal loan guarantee programs, illustrating to lenders
that Indian Country is a good investment. Eliminating this program
would lead to a decline in an already under-financed landscape of
Tribal community and economic development projects. Elimination would
also compound the undue burden of Tribal Nations having to educate non-
Native investment and guarantee programs on the unique and complex
lending issues on federal trust lands and with Tribally-owned
Enterprises. We urge Congress to restore funding for the program in the
Fiscal Year 2020 appropriations process.
Universal Commercial Codes
USET SPF encourages the continued build-out of technical assistance
for Tribal Nations to draft and implement government programs to
facilitate investment and economic development in Tribal communities;
specifically, the development of Universal Commercial Codes. The Office
of Indian Energy and Economic Development has previously partnered with
other government programs to provide training sessions for Tribal
Nations on how to implement a model commercial code. Reinstituting
these trainings would provide necessary assistance to Tribal Nations in
implementing principled strategies to build sound economic development
frameworks that support vibrant Tribal economies. In addition, the
technical assistance curriculum would benefit from the addition of
training on transaction recording and filing.
Minority Business Development Administration (MBDA)
USET SPF supports the continued outreach of the MBDA to Indian
Country and technical assistance to support the development of Tribal
entrepreneurship. We support and look forward to future Board Agency
Announcements funding technical assistance programs to Tribal Nations
in the USET SPF region. Currently, there is no designated Native
American Business Enterprise Center in the USET SPF region. This
excludes of USET SPF member Tribal citizens' and Tribally-owned
enterprises from participating in MBDA programs. USET SPF encourages
the equitable expansion of the Native American Business Enterprise
Center (NABEC) Program across Indian Country, including the Tribal
Nations in our region.
U.S. Department of Agriculture
Broadband
USET SPF encourages continued broad, cross-agency support,
including USDA Rural Development, in providing technical assistance and
guidance on instillation, development, and utility management for
Tribal Nations to development communication and broadband projects. As
has been reflected by others, having reliable connectivity for
communications and Internet service is vital to the health and safety
of all communities and local economies, none more-so than Tribal
communities. However, we continue to stress that any infrastructure
build-out, whether on- or off- Tribal lands, cannot come at the expense
of Tribal consultation, sovereignty, sacred sites, or public health.
Farm Bill Implementation
In addition, USET SPF recognizes that the 2018 Farm Bill contains a
host of new opportunities for community and economic development in
Indian Country. As USDA begins implementation of this law, it is
critical that Tribal Nations are meaningfully consulted throughout the
process. This includes ensuring that Tribal guidance and expectations
are incorporated before rulemaking can conclude. Senate Committee on
Indian Affairs should exercise its oversight authority and
responsibilities to ensure that this occurs.
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