[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                        ECONOMIC DIVERSIFICATION TO 
                              CREATE PROSPEROUS
                              TRIBAL ECONOMIES

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

                           OVERSIGHT HEARING

                               BEFORE THE

               SUBCOMMITTEE ON INDIAN AND INSULAR AFFAIRS

                                 OF THE

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             SECOND SESSION

                               __________

                      Thursday, February 15, 2024

                               __________

                           Serial No. 118-97

                               __________

       Printed for the use of the Committee on Natural Resources
       
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        Available via the World Wide Web: http://www.govinfo.gov
                                   or
          Committee address: http://naturalresources.house.gov
          
                              __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
54-897 PDF                  WASHINGTON : 2024                    
          
-----------------------------------------------------------------------------------             


                     COMMITTEE ON NATURAL RESOURCES

                     BRUCE WESTERMAN, AR, Chairman
                    DOUG LAMBORN, CO, Vice Chairman
                  RAUL M. GRIJALVA, AZ, Ranking Member

Doug Lamborn, CO			Grace F. Napolitano, CA
Robert J. Wittman, VA			Gregorio Kilili Camacho Sablan, 	
Tom McClintock, CA			    CNMI
Paul Gosar, AZ				Jared Huffman, CA
Garret Graves, LA			Ruben Gallego, AZ
Aumua Amata C. Radewagen, AS		Joe Neguse, CO
Doug LaMalfa, CA			Mike Levin, CA
Daniel Webster, FL			Katie Porter, CA
Jenniffer Gonzalez-Colon, PR		Teresa Leger Fernandez, NM
Russ Fulcher, ID			Melanie A. Stansbury, NM
Pete Stauber, MN			Mary Sattler Peltola, AK
John R. Curtis, UT			Alexandria Ocasio-Cortez, NY
Tom Tiffany, WI				Kevin Mullin, CA
Jerry Carl, AL				Val T. Hoyle, OR
Matt Rosendale, MT			Sydney Kamlager-Dove, CA
Lauren Boebert, CO			Seth Magaziner, RI
Cliff Bentz, OR				Nydia M. Velazquez, NY
Jen Kiggans, VA				Ed Case, HI
Jim Moylan, GU				Debbie Dingell, MI
Wesley P. Hunt, TX			Susie Lee, NV
Mike Collins, GA
Anna Paulina Luna, FL
John Duarte, CA
Harriet M. Hageman, WY

                    Vivian Moeglein, Staff Director
                      Tom Connally, Chief Counsel
                 Lora Snyder, Democratic Staff Director
                   http://naturalresources.house.gov
                                 ------                                

               SUBCOMMITTEE ON INDIAN AND INSULAR AFFAIRS

                     HARRIET M. HAGEMAN, WY, Chair

                JENNIFFER GONZALEZ-COLON, PR, Vice Chair

               TERESA LEGER FERNANDEZ, NM, Ranking Member

Aumua Amata C. Radewagen, AS         Gregorio Kilili Camacho Sablan, 
Doug LaMalfa, CA                         CNMI
Jenniffer Gonzalez-Colon, PR         Ruben Gallego, AZ
Jerry Carl, AL                       Nydia M. Velazquez, NY
Jim Moylan, GU                       Ed Case, HI
Bruce Westerman, AR, ex officio      Raul M. Grijalva, AZ, ex officio

                              -----------                                
                                
                               CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, February 15, 2024......................     1

Statement of Members:

    Hageman, Hon. Harriet M., a Representative in Congress from 
      the State of Wyoming.......................................     1
    Leger Fernandez, Hon. Teresa, a Representative in Congress 
      from the State of New Mexico...............................     3

Statement of Witnesses:

    Ahasteen, Justin, Executive Director, Navajo Nation 
      Washington Office, Washington, DC..........................     5
        Prepared statement of....................................     7
        Questions submitted for the record.......................    13
    Rupert, Sherry, CEO, American Indian Alaska Native Tourism 
      Association, Albuquerque, New Mexico.......................    15
        Prepared statement of....................................    17
        Questions submitted for the record.......................    21
    Bacon, Raymond, Executive Director, Yurok Tribe Economic 
      Development Corporation, Klamath, California...............    24
        Prepared statement of....................................    25
        Questions submitted for the record.......................    27

    Morgan, Lance, CEO, Ho-Chunk, Inc., Winnebago, Wisconsin.....    29
        Prepared statement of....................................    31
        Questions submitted for the record.......................    33

Additional Materials Submitted for the Record:

    Submissions for the Record by Representative Grijalva

        United South and Eastern Tribes Sovereignty Protection 
          Fund, Statement for the Record.........................    42



 
   OVERSIGHT HEARING ON ECONOMIC DIVERSIFICATION TO CREATE PROSPEROUS.
                            TRIBAL ECONOMIES

                              ----------                              


                      Thursday, February 15, 2024

                     U.S. House of Representatives

               Subcommittee on Indian and Insular Affairs

                     Committee on Natural Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to notice, at 10:18 a.m., in 
Room 1324, Longworth House Office Building, Hon. Harriet M. 
Hageman [Chairwoman of the Subcommittee] presiding.
    Present: Representatives Hageman, Carl; Leger Fernandez.
    Also present: Representative Huffman.

    Ms. Hageman. The Subcommittee on Indian and Insular affairs 
will come to order.
    Without objection, the Chair is authorized to declare a 
recess the Subcommittee at any time.
    The Subcommittee is meeting today to hear testimony on 
economic diversification to create prosperous tribal economies.
    Under Committee Rule 4(f), any oral opening statements at 
hearings are limited to the Chairman and the Ranking Minority 
Member. I therefore ask unanimous consent that all other 
Members' opening statements be made part of the hearing record 
if they are submitted in accordance with Committee Rule 3(o).
    Without objection, so ordered.
    I ask unanimous consent that the gentleman from California, 
Mr. Huffman, be allowed to sit and participate in today's 
hearing.
    Without objection, so ordered.
    I will now recognize myself for an opening statement.

 STATEMENT OF THE HON. HARRIET M. HAGEMAN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF WYOMING

    Ms. Hageman. I want to first thank all of our witnesses for 
making the trip here and being willing to discuss these 
important issues.
    Today's hearing is entitled, Economic Diversification to 
Create Prosperous Tribal Economies. Today, we will hear from 
tribal stakeholders on ways tribes have diversified their 
economies to create jobs, revenue, and opportunities that 
benefit tribes, tribal members, and their communities.
    Every local, state, Federal, and tribal government knows 
that a diverse economy is healthy and resilient and will 
encourage entrepreneurship, innovation, and ultimately human 
flourishing.
    Since the 1970s, the Federal Government has embraced a 
tribal policy of self-determination, which supports tribal 
governments to self-direct both services provided to their 
people and economic development plans that support tribal 
government services.
    Tribes have consistently sought to diversify their tribal 
economies through various means so that they can expand 
services to tribal members and build sustainable economies to 
benefit current and future generations.
    Many tribes have pursued agriculture, gaming, natural 
resource development, business ventures, tourism, and other 
avenues to build their economies. These ventures have impacted 
not only tribes and tribal members, but also the surrounding 
communities.
    In January 2020, estimates showed that tribal governments 
and tribal economic enterprises provided over 1.1 million jobs 
within the U.S. economy, with most jobs held by non-tribal 
members.
    In many places, particularly our rural communities where 
tribes are present, the tribe or tribal enterprises are the 
leading employer in the area. For example, the collective 
Tribal Nations of Oklahoma contribute $15.6 billion to the 
economy and 113,442 jobs in 2019 alone.
    Over the years, they also contributed over $1.8 billion to 
public education and mental health services, with an additional 
$84 million going to support schools, municipalities, and other 
community initiatives.
    All that said, the overall impact of tribes on the U.S. 
economy is expansive and generally under-reported. However, 
there continues to be many barriers for tribes when it comes to 
economic development and diversification.
    Real property is one of, if not the most, important 
economic resource that our tribes have. Yet, there are still a 
multitude of restrictions and requirements that could dictate 
how and when land can be used, depending on its status.
    This Subcommittee has held several hearings that have 
highlighted how bureaucratic red tape can stymie land use and 
natural resource development. Streamlining regulatory 
requirements so they are not duplicative or burdensome is 
crucial.
    Tribal Nations and enterprises have also engaged in the 
recreation and tourism industries to tell their own stories and 
to develop unique experiences for domestic and international 
tourists.
    In 2021, American Indian Alaskan Native and Native Hawaiian 
owned tourism businesses provided 117,852 jobs across 40,618 
businesses. These Native tourism businesses contributed $14 
billion to the total $1.7 trillion U.S. tourism related 
industry.
    Tribes have had to overcome the challenge of not having a 
property tax base and have sought diverse revenue streams 
through business ventures. They have developed corporate 
structures that are sophisticated and innovative to enable 
incomes to tribal governments so that governmental services can 
be provided to members and supplement the Federal funds that 
already support health and human services to our tribal 
members.
    I look forward to hearing all about how economic 
diversification has benefited tribes and where we can go from 
here.
    I again want to thank the witnesses for being with us 
today, and I look forward to hearing your testimony.
    The Chair now recognizes the Ranking Minority Member for 
her statement.

STATEMENT OF THE HON. TERESA LEGER FERNANDEZ, A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW MEXICO

    Ms. Leger Fernandez. Thank you so very much, Madam Chair, 
and I am always grateful for the wisdom and knowledge that our 
witnesses bring to this hearing room and bring to our efforts 
to improve issues and to address the issues that face Indian 
Country and today to help us learn how to best diversify and 
grow tribal economies.
    Diversifying tribal economies and developing and expanding 
economic opportunities for your communities is critical for 
tribal self-determination and sovereignty.
    Economic sovereignty is an essential element of tribal 
sovereignty and the manner in which tribes have experienced and 
grown that economic sovereignty is vast and growing. It is 
innovative.
    You are thinking out of the box, and you are getting things 
done that benefit not just your communities, but as noted, the 
rural communities within which you are located, the urban 
communities that we must remember, many tribes are adjacent to 
and located within.
    Our work in this Subcommittee and in Congress should focus 
on what do we do to remove the barriers to address the 
injustices that may limit the manner in which you can grow your 
tribal economic endeavors.
    Over the last Congress in the last few years, we have made 
progress with historic legislation like the Inflation Reduction 
Act, which was intended to lower energy costs and open up new 
areas of possibility for tribal growth.
    The Infrastructure Law, because if we do not have the 
broadband, the electricity, the water, you cannot have 
business. The Chips and Science Act because we need to start 
manufacturing in America what we need in America.
    It can be done on tribal lands just as well, and 
oftentimes, with better results and better opportunities than 
off tribal lands because of unique situations that tribes bring 
to the equation.
    The Inflation Reduction Act increased funding for the 
tribal Energy Loan Guarantee Program from $2 billion to $20 
billion to support tribal investment in energy-related 
projects.
    It also provided tribes access to direct pay tax 
incentives, which will support tribal energy projects being 
built more quickly and affordably through clean energy tax 
incentives.
    This was a priority of mine because I realized and 
recognized that we were not able to monetize the traditional 
tax incentives provided to the industry as we looked at 
renewable energy. It was something, an oversight that existed 
for decades, and now we are starting to change that.
    The Infrastructure Law set aside $13 billion for tribal 
infrastructure to fund essential services for tribes, from 
broadband to transportation to water wide settlement. Once 
again, without water you cannot grow a business.
    And the Chips and Science Act required the National Science 
Foundation to award grants through the Tribal Colleges and 
Universities Program to increase participation in computer 
science and education programs.
    These historic investments made important projects 
possible, such as $200,000 from the Infrastructure Law for the 
Choctaw Nation of Oklahoma to install electric vehicle charging 
infrastructure to serve the larger Durant, Oklahoma area, or 
the $4.7 million for Zia Pueblo in New Mexico to connect over 
200 unserved Native American households and small businesses to 
high-speed broadband.
    As we continue to implement this historic funding, I look 
forward to attending groundbreakings where we are putting up 
solar panels, buying infrastructure lines, and building 
essential facilities.
    This funding is all a step in the right direction and can 
be essential for tribes to provide the economic stability in 
their communities and in the surrounding communities. But we 
know the work doesn't stop with the funding, and funding is not 
the only answer.
    Once these programs are out there, funding and new 
resources must be accessible to tribes, and programs should be 
developed and implemented in coordination and with tribes in 
the lead.
    We need technical assistance to access the funds so we 
don't leave a dime in DC when it can be put into the ground and 
into projects in your communities. We need to make sure that we 
address the complexities and the overlapping and multiplicity 
of requirements to be able to use your very own land for these 
projects, the leasing, the right-of-way. We need to get it down 
and get it down so it is working and working quickly.
    Otherwise, we really are not upholding our trust and treaty 
obligations to Tribal Nations. Time and time again, this 
Committee has heard how difficult it can be to get funding on 
the ground and concerns regarding the lack of consultation in 
expanding projects in their areas.
    This cannot remain the status quo. While unemployment, 
limited housing, limited workforce housing and undeveloped 
infrastructure remain real issues in Indian Country, we in the 
Federal Government, we in Congress, need to do more to make 
sure these resources we are developing and implementing are 
reaching your communities.
    I look forward to hearing from each of you about how we can 
get that done, about what we need to do to remove these 
obstacles. We need to know how do we get the great things that 
you are already doing from river restoration, tourism, clean 
energy, natural resources project, all the businesses, the 
manufacturing.
    How can we make sure that this is not the end, but the 
beginning as we build the blocks of economic sovereignty for 
your communities?
    Thank you once again for being here today. With that, I 
yield back.

    Ms. Hageman. Thank you. And I will now introduce our 
witnesses for our panel.
    Mr. Justin Ahasteen, how did I do with that?
    Mr. Ahasteen. OK
    Ms. Hageman. He is the Executive Director for the Navajo 
Nation Washington Office, Washington, DC; Ms. Sherry Rupert, 
CEO, American Indian Alaska Native Tourism Association, 
Albuquerque, New Mexico; and I also would like to recognize Mr. 
Huffman for 1 minute to introduce the witness from his 
district.
    Mr. Huffman. Madam Chairman, thank you. I am proud to 
introduce Raymond Bacon. He is the Executive Director of 
economic development for the Yurok Tribe in my district.
    It is California's largest Native American tribe. Ancestral 
lands of the Yurok are on the beautiful north coast. And the 
Yurok have supported countless strategic investments in 
innovative strategies in our region.
    They have a portfolio that includes 13 businesses, with 
four sister corporations. They have carefully developed a 
variety of revenue streams for economic resilience and expanded 
their business operations to encompass several different 
sectors: hospitality, of course, with their golf course; 
cutting edge technology, with their aviation lidar mapping; and 
a fuel mart division.
    Their forward-thinking approach extends beyond traditional 
sectors and is exemplified by the Telecommunications 
Corporation the Tribe has, which is expanding broadband 
accessibility in our region.
    All of these are success stories that I think will 
contribute to this important conversation today. So, welcome, 
Mr. Bacon.
    Ms. Hageman. Thank you, Mr. Huffman.
    And finally, Mr. Lance Morgan, President and CEO, Ho-Chunk, 
Inc., Winnebago, Nebraska.
    Let me remind the witnesses that under Committee Rules, 
they must limit their oral statements to 5 minutes, but their 
entire statement will appear in the record.
    To begin your testimony, please press the ``talk'' button 
on the microphone. We use timing lights. When you begin, the 
light will turn green. When you have 1 minute left, the light 
will turn yellow, and at the end of 5 minutes, the light will 
turn red, and I will ask you to please complete your 
statements.
    I will also allow all witnesses on the panel to testify 
before Member questioning.
    The Chair now recognizes Mr. Justin Ahasteen for 5 minutes.

STATEMENT OF JUSTIN AHASTEEN, EXECUTIVE DIRECTOR, NAVAJO NATION 
               WASHINGTON OFFICE, WASHINGTON, DC

    Mr. Ahasteen. Ya'at'eeh, Chair Hageman, Ranking Member 
Leger Fernandez, and members of the Subcommittee.
    My name is Justin Ahasteen. I am Bilagaana born for 
Totsohnii. My maternal grandfather is Bilagaana, and my 
paternal grandfather is Kiis'aanii.
    I am the Executive Director of the Navajo Nation Washington 
Office, providing testimony on behalf of Dr. Buu Nygren, 
President of the Navajo Nation.
    Thank you for the opportunity to testify before this 
Subcommittee on the topic of economic diversification in Indian 
Country.
    If I were to summarize the history of the Navajo economy in 
just a few words, I would probably say interrupted progress.
    The Navajo Nation was one of the largest Native American 
tribes in the country, with over 400,000 enrolled members, with 
a reservation stretching over 27,000 square miles in Arizona, 
New Mexico, and Utah.
    Even though the land has challenges, like limited water 
resources, it also has enormous potential to sustain our 
people.
    For generations our people thrived, building homes, raising 
livestock, and planting orchards until the United States 
destroyed everything in the 1860s. We returned to our lands 
after the long walk and began to rebuild.
    But yet again in the 1930s, our wealth was taken away 
through the livestock reduction program, which slaughtered two-
thirds of our livestock.
    With limited water resources, the Federal Government told 
us the only way to prosperity was through mineral extraction. 
One of the largest jobs created by the Federal Government was 
uranium mining, which employed thousands of Navajo citizens 
during the Cold War, but left behind a legacy of radiation 
poisoning, death, and open mines that have yet to be 
remediated.
    The Black Mesa Coal Mine generated millions of dollars in 
revenue for the Navajo government, but ultimately depleted over 
44 billion gallons of water from our aquifers, drying up 
springs that our people relied on to provide water to their 
families and to their livestock.
    The most recent blow was probably when the Navajo 
generating station near Page, Arizona, was permanently shut 
down. The Navajo generating station had 538 employees, a 
majority of whom were Navajo, and paid about $52 million in 
wages every year.
    The loss of that income severely damaged the Navajo economy 
and the local community has yet to recover. Time and time 
again, the Federal Government promised us jobs and prosperity, 
but the promise was often illusory, and the jobs were a devil's 
bargain.
    For over 50 years, we have known that we need to diversify 
our options, and we have worked tirelessly towards that goal. 
We now have a dozen tribal enterprises that bring revenue to 
the Navajo Nation government and provide good jobs to our 
people, but it clearly isn't enough.
    Despite an educated and talented workforce, we struggle to 
make progress. Many citizens still lack basic infrastructure, 
such as running water, sanitation, housing, and paved roads.
    And our unemployment rate sits at about 57 percent. The 
fact of the matter is, the Navajo Nation is not a small casino 
tribe with a few hundred citizens that can live off the gaming 
revenues.
    We have a casino, but it is located far from major 
population centers and only generate modest revenue. Even our 
most successful enterprises cannot employ all of our citizens 
directly, and they shouldn't have to.
    We need a variety of businesses operating in the Navajo 
Nation, representing all sorts of industries. We need to 
empower our entrepreneurs to dream big and take risks that will 
create the industries for tomorrow.
    But sadly, this isn't happening. No company wants to invest 
in a community with a dirt road that is effectively impassable 
for weeks at a time. But we can't pave our roads without 
gravel, and we can't dig our gravel pits without getting 
permission from the Department of the Interior.
    Many entrepreneurs use a mortgage to secure startup funds, 
but our people don't own their homes, which means there is no 
equity to leverage to start a new business.
    I don't mean to sound overly pessimistic. There have been 
great strides to help Indian Country since the self-
determination era began.
    We have been the beneficiaries of many Federal programs 
meant to help tribes start their own enterprises, and we hope 
to benefit from even more.
    Though my written testimony identifies problems with many 
of the recent programs, one of these programs is the State 
Small Business Credit Initiative, which we hope will provide a 
perpetual infusion of capital to empower small businesses to 
compete on and off the reservation.
    But one thing that we do need is for the Federal Government 
and state governments to get out of the way. The Dine people 
are hardworking, creative, and we are ready to take on any 
opportunity. But those opportunities will only come when tribes 
are given exclusive jurisdiction over their lands and not 
beholden to the Federal Government or the state governments to 
dictate how business is done.
    In conclusion, I would like to reaffirm our unwavering 
commitment to building a diverse and sustainable Navajo economy 
and creating opportunities for all members of our community.
    I look forward to collaborating to improve the lives of the 
Navajo people, and it is my sincere hope that our efforts will 
be able to remove the barriers that stand in the way for a 
prosperous Navajo economy.
    I am happy to answer any questions that you may have, and 
thank you.

    [The prepared statement of Mr. Ahasteen follows:]
   Prepared Statement of Justin Ahasteen, Executive Director, Navajo 
                        Nation Washington Office

    Ya'at'eeh Chair Hageman, Ranking Member Leger Fernandez, and 
Members of the Subcommittee.

    My name is Justin Ahasteen. I am Bilagaana (White), born for 
Totsohnii (Big Water). My maternal grandfather is Bilagaana (White) and 
my paternal grandfather is Kiis'aanii (Hopi). I am the Executive 
Director of the Navajo Nation Washington Office, providing testimony on 
behalf of Dr. Buu Nygren, President of the Navajo Nation (``Nation'').
    Thank you for the opportunity to testify before the Subcommittee on 
Indian and Insular Affairs on the topic of economic diversification in 
Indian Country. The Navajo Nation is one of the largest Native American 
tribes in the country and provides critical governmental services to 
over 400,000 members, half of whom reside our lands. The Navajo Nation 
encompasses over 27,000 square-miles or just over 17.5 million acres, 
stretching across 11 counties in three states--Arizona, New Mexico, and 
Utah.
    In 1868, the United States entered into a treaty with the Navajo 
Nation, promising health care, education, agricultural assistance, and 
to improve the wellbeing of the Navajo people in perpetuity. As such, 
the United States government is legally and morally bound with a treaty 
responsibility and a sacred trust obligation, to support the Navajo 
Nation in addressing the many challenges we face, including in 
developing our economy, which is proven to be one of the most effective 
ways to increase the overall wellbeing of a people.
    Given our land and population size, the social and economic needs 
of the Navajo people are heavy in many of our communities, including a 
lack of basic infrastructure such as running water, sanitation, 
housing, electricity, paved roads, as well as a high unemployment rate 
of 57% across the Nation. The strain on our tribal government is large, 
making it difficult to provide adequate services to our Dine people. 
The Navajo Nation is pursuing new and innovative ways to create 
economic prosperity for our citizens, and we look forward to working 
with this Subcommittee to advance tribal sovereignty, self-
determination, and the economic well-being of the Navajo Nation and all 
of Indian Country.
Early Development of the Navajo Economy

    With a population spread out across one of the more arid regions of 
the American Southwest, life has never been easy for the Navajo people. 
Despite the harsh living conditions of our environment, we adapted, and 
we slowly built an economy that could sustain us. But as anyone 
familiar with economics knows, capital is built slowly over 
generations, but it can be destroyed in an instant.
    In 1864, following a series of conflicts with American military 
forces, thousands of Navajo men, women, and children were forcibly 
removed from our ancestral homelands in what would become the states of 
Arizona and New Mexico, and sent on a forced march of 300 miles, which 
came to be known as the ``Long Walk.'' Hundreds of our people died on 
the journey, and thousands more, approximately one in four, died during 
the subsequent internment at Bosque Redondo.
    Prior to the Long Walk we had spent centuries perfecting an 
agricultural system that was suited to the conditions available. Then 
Colonel Kit Carson and his men were ordered to force the Navajo people 
into starvation by razing everything to the ground. As part of their 
scorched earth policy, his men destroyed everything, burning our 
villages, chopping down the peach orchards that once covered the floor 
of Canyon de Chelly, and slaughtering our livestock, all of which 
providing our people with shelter and a reliable source of sustenance.
    Once we were allowed to return to our lands, we had nothing and had 
to build our lives again from scratch. Most Navajo families maintained 
small herds of sheep, cattle, and other livestock to provide a meagre 
income through end of the 19th and the first half of the 20th 
centuries. Just as the Navajo people began to accumulate some wealth in 
the form of their herds, the federal government initiated the livestock 
reduction program, citing concerns about the impact of the growing 
herds on the local vegetation as a justification. The program led to 
the slaughter of as many as two-thirds of our sheep, forcing a strict 
quota on the number of animals we could own. This program devastated 
the already-weak Navajo economy, throwing many families who were 
already living in poverty into even greater hardship. It quickly became 
clear that our people would have to look to outside sources for 
additional income.
    Shortly before the livestock reduction program was enacted, oil and 
gas were discovered on the Navajo Nation. Anxious to gain access to 
these precious resources, the Department of Interior established the 
Navajo Business Council (the eventual primary legislative body of the 
Nation in the form of the Navajo Nation Council) to certify mineral 
leases on Navajo lands. Navajo leaders were not given much choice but 
to allow outsiders to come and extract their natural resources. In time 
these industries proved to provide some benefit in the form of jobs for 
the Navajo people, but the jobs were often dangerous and while they 
provided significant revenues, the harm caused by the industry often 
outweighed the benefits.
    Uranium mining employed thousands of Navajo citizens during the 
Cold War, but left behind a legacy of radiation poisoning, death, and 
open mines that have yet to be fully remediated, more than thirty years 
after most of the mines ceased operations. The Black Mesa coal mine 
generated millions of dollars in revenue for the Navajo government, but 
ultimately depleted over 44 billion gallons of water from our aquifers, 
drying up springs that our people relied on to provide water to their 
families and livestock. The aquifer may take decades to fully recover, 
assuming it ever does. The only saving grace of these operations is 
that they provided jobs, but one by one each of them was shutdown, 
leaving us with few viable alternatives. The most recent blow was 
probably when the Navajo Generating Station (``NGS'') near Page, 
Arizona was permanently shut down. NGS had 538 employees, a majority of 
whom were Navajo, and paid about $52 million in wages every year. The 
loss of that income severely damaged the Navajo economy, and the local 
community has yet to recover.
    Long before the NGS shutdown, we recognized that we could not rely 
on a single industry forever to provide the growth and stability that 
our economy needs. Rather than place all our proverbial eggs into one 
basket, we have worked tirelessly for over 50 years to diversity our 
economy. We have a dozen tribal enterprises that bring varying amounts 
of revenue to the Nation, including a hospitality enterprise focused on 
increasing our tourism industry; a newspaper and radio station; four 
casinos; the Navajo Tribal Utility Authority; the Dine Development 
Corporation--which for over 20 years have provided IT, professional, 
and other support to governmental agencies and commercial 
organizations--the Navajo Arts and Crafts Enterprise, as well as many 
others. The Dine people are hardworking and creative, and ready to take 
on any opportunity.
    However, the fact of the matter is none of our enterprises makes up 
for the revenue lost from our waning economy based on mineral 
extraction. Despite our efforts to seize every opportunity, we find 
that many opportunities are illusory. In many instances, the Nation 
faces bureaucratic red tape which prevents us from accessing the 
opportunities afforded to us or from creating opportunities for 
ourselves. In other instances, the opportunity to create economic 
development is fleeting and more time and money is needed from 
Congress.
    Below are examples of areas where the Navajo Nation and other 
tribes have experienced difficulties in creating economic development, 
as well as potential solutions on how this Subcommittee can assist us--
and all Indian Country--in overcoming them.
Gravel Pits and Unpaved Roads

    Given the size and rural nature of our reservation, it is important 
to the safety and well-being of our people--as well as for their 
economic prosperity--that we have paved roads. Unfortunately, 77% of 
our roads are unpaved roads, which equates to approximately 13,000 
miles of unpaved roads. During poor weather, our unpaved roads can 
become muddy and impossible to practically or safely traverse, which 
forces drivers to either abandon their trips or find other ways around. 
It is not uncommon for an unpaved road in poor weather conditions to 
add over 2 hours to a trip.
    The current cost per mile of pavement is over $3 million in the 
Nation, three times higher than the cost per mile to pave a road in a 
major metropolitan area like Phoenix. Much of this cost is due to 
restrictions created by the Department of the Interior (``DOI'') which 
have prohibited the Navajo Nation from using its own gravel pits. 
Instead, we have been forced to import road materials from off the 
reservation significantly driving up costs. Most recently, DOI has 
informed the Nation that we would need to develop our own regulations 
in order to access and use our own gravel pits. We have requested 
technical assistance from DOI and the Bureau of Indian Affairs for what 
specifically is needed in these regulations and have not received a 
response.

    Potential Solution: Amend the legislation and/or call on DOI to 
make itself immediately available to provide technical assistance or to 
reduce its regulatory requirements so we can access and use our gravel 
pits on our reservation.
Fractionalization and Economic Development

    Another barrier to paving our roads has been fractionalization. As 
this Subcommittee knows, the Navajo Nation was able to make some of the 
largest recoveries under the Land Buy-Back Program. This was important 
for many reasons, including for the construction of paved roads. One of 
the successes that we were able to achieve through the Land Buy-Back 
Program was the paving of a road in our Casamero Lake Chapter. This was 
impossible before because we were unable to locate the approximately 
400 landowners needed to approve the construction. Through the Land 
Buy-Back Program we were able to consolidate our interests without 
having to locate these landowners and move forward with the 
construction. The impact on the Casamero Lake Chapter has been dynamic. 
Our people out there now have safer roads and improved access to 
school, work, commerce, health, and emergency services.
    Despite that success, there are still 1,200 fractionated parcels 
held by nearly 15,000 landowners checkerboarded across our reservation. 
These fractionated parcels prevent us from exercising our jurisdiction 
over the lands and from providing critical resources such as water, 
electricity, and other utility services. The result of these 
fractionations is a substantial hardship on our people, which is 
exacerbated by the chilling effect that these fractionations produce on 
outside investors.

    Potential Solution: Continue to fund and support the Land Buy-Back 
Program.
Non-Metropolitan Statistical Area Designations

    The Department of Treasury's Internal Revenue Service (``IRS'') 
uses statistical areas defined by the Bureau of Labor Statistics 
(``BLS'') to distort the economic circumstances of the Navajo Nation, 
which results in our being ineligible for various tax credit programs. 
The distortion is that the Navajo Nation is not considered a stand-
alone non-metropolitan statistical area (``non-MSA'') and is instead 
evaluated with consideration to counties in Arizona, New Mexico, and 
Utah. The use of employment and other economic data from areas outside 
the Navajo Nation to determine the economic health of the Navajo Nation 
distorts the economic reality faced by our citizens and creates 
negative effects.
    An example of the negative effect our BLS statistical areas 
classification is our ineligibility to use certain tax credits. Under 
the Inflation Reduction Act (``IRA''), for instance, energy projects 
can enjoy an Energy Community Tax Credit bonus when located in Energy 
Communities for the purpose of supporting and revitalizing the 
economies of coal and power plant communities. The Navajo Nation is a 
coal and powerplant community, yet through the Department of Treasury's 
interpretation of Section 13702 of the IRA, projects located on the 
Navajo Nation will not necessarily enjoy the Energy Community Tax 
Credit Bonus because the criteria for determining if a project 
developed on the Navajo Nation is located in an Energy Community will 
be reviewed using economic data from areas far beyond the Navajo 
Nation. This result seems inconsistent both with Congress' general 
intentions under the IRA and this Administration's focus on racial 
equity and environmental justice through Executive Order 13985 
(Advancing Racial Equity and Support for Underserved Communities), 
Executive Order 14008 (Tackling the Climate Crisis at Home and Abroad), 
Executive Order 14096 (Revitalizing Our Nation's Commitment to 
Environmental Justice for All), and the Justice40 Initiative.

    Potential Solution: Call on BLS to revisit their non-MSA 
statistical determinations through consultation with tribes.
Jurisdictional Issues

    While fractionalization can create areas within our reservation 
where we lack jurisdiction, our jurisdiction on our own lands is 
limited due to dual compliance and taxation. Having to share our 
authority and jurisdiction with outside governments not only harms our 
sovereignty but also greatly reduces our ability to attract outside 
investment onto our reservation.
    Economics teaches us that to be competitive, communities need to 
identify areas where they can establish a competitive advantage over 
other communities. One way poorer countries have successfully built a 
competitive advantage over the years has been to offer generous tax 
rates that attract business investment. So long as non-Native companies 
have to pay both tribal and state taxes, it is impossible for tribes to 
offer competitive rates, leaving us with the option of either making 
the business climate on the reservation less competitive than doing 
business off-reservation in the state, or charging no tax at all, 
eliminating an important revenue source that supports our tribal 
government and services to our people. The same is true of 
environmental and other clearances. We often find that a business needs 
twice as many clearances to build on a reservation as they do off the 
reservation, which can mean the difference of millions of dollars and 
years to establish a large enterprise.
    The fact of the matter is the Navajo Nation is not a small casino 
tribe with a few hundred citizens that can all live off gaming revenue. 
We cannot employ all of our citizens directly, nor is it advisable that 
we do so. Central planning rarely works on a large scale, so we need a 
variety of employers operating in the Nation representing a variety of 
industries. Such diversity will enable us to build a more resilient 
economy that can weather the changing economic climate in an uncertain 
world. But building that kind of economy is going to require outside 
capital and investment, and that is currently difficult given the 
unfavorable business climate on most reservations due to the 
jurisdictional overlap between tribal and state governments.
    This is particularly true of our entrepreneurs. The beauty of a 
market economy is that individual entrepreneurs can innovate and 
produce new ventures that a central government planner could never have 
dreamed of. We need to empower our entrepreneurs to dream and to take 
risks, knowing that even failed ventures help pave the way for future 
innovations and growth. That is why we have worked with the Department 
of the Treasury to set up our State Small Business Credit Initiative 
(``SSBCI'') program discussed in more detail below. By making loans to 
small Navajo-owned businesses, we can help fill the credit gap that 
exists on many reservations. But providing credit is not enough. Our 
small business owners and entrepreneurs will face many of the same 
challenges, if not more, that currently prevent larger investments on 
tribal lands. That is why it is so important to eliminate some of the 
barriers to entry that exist because of the jurisdictional overlap.

    Potential Solution: End dual taxation and dual compliance 
requirements for environmental and other clearance processes.
Tribal Energy Loan Guarantee Program

    The Department of Energy's (``DOE'') Tribal Energy Loan Guarantee 
Program (``TELGP'') was established by the Energy Policy Act of 2005. 
The intention behind TELGP was to support tribal investment in energy-
related projects by providing loan guarantees to tribes seeking 
financing for capital intensive energy projects to prevent tribes from 
being shut out of capital markets due to a lack of commercial credit 
histories or ratings. Recently, the funding for the program was 
increased under the IRA from $2 billion to $20 billion, with an 
additional $75 million allocated to the Department of Energy to run the 
program. Despite Congress' intent to create important opportunities 
through TELGP for Indian Country, not a single dollar has been used 
from this program to guarantee a tribal loan for an energy-related 
project.

    Here are three examples of issues with the TELGP program and a 
potential solution for each.

  1.  The DOE requirement that a tribe or tribal entity first obtain a 
credit rating from a nationally recognized rating agency defeats the 
entire purpose of the loan guarantee program and is burdensome and 
costly.

    Obtaining and maintaining a rating can cost over $100,000 per year. 
This is a significant cost for a tribe or tribal entity who has no 
guarantee of obtaining the subsidy from the TELGP. Also, in many cases 
misperceptions concerning the riskiness of lending to Native borrowers 
hampers the ability of tribes and tribal entities to receive the rating 
requirement. Again, this was the very problem this program was intended 
to solve.

    Potential Solution: Amend the legislation and/or call on DOE to 
eliminate the need for a tribal credit rating and instead require that 
DOE rely on the bank's loan review and monitoring process. A tribal 
entity can demonstrate its ability to repay loans of this size through 
its history of doing so and its forward cash flow projections. This has 
worked with the Bureau of Indian (``BIA'') loan guarantee program and 
Small Business Administration loan guarantee program.

  2.  Expand the Number and Type of Qualified Financial Institutions.

    DOE uses an approval process for financial institutions that is 
overly restrictive, sidelining specialized lending institutions that 
are seeking to support tribal energy projects. DOE's Financial 
Institution Partnership Program works for large national banks and 
projects with utilities and well-financed publicly traded energy 
corporations, but it does not work for tribes and tribal entities.

    Potential Solution: Amend the legislation and/or call on DOE to 
allow specialized lenders and other types of lenders who issue credit 
and finance projects as a regular course of business. DOE could achieve 
this by modeling procedures developed and implemented by the BIA loan 
guarantee program to monitor and approve loan guarantees.

  3.  DOE Due Diligence Is Unnecessarily Burdensome and Redundant.

    Rather than relying on and confirming the due diligence of the 
lending institution, DOE has developed a separate internal process that 
requires additional review and documentation unnecessary to the 
program.

    Potential Solution: Amend the legislation and/or call on DOE to 
streamline the due diligence process so that the diligence effort falls 
on the bank or lending institution. DOE and tribes will benefit by 
simplifying the process and providing certainty: If the borrower can 
meet payment obligations, then DOE issues the loan guarantee.

Elective Pay to Tribes Under the Inflation Reduction Act

    The IRA added significant potential benefits for tribal entities to 
the Internal Revenue Code. Specifically, qualifying tribal entities are 
eligible for 12 years of elective (direct) pay on projects under IRC 
Section 45Q (carbon capture), 45V (hydrogen) and 45X (renewable) 
projects. I understand that the Department of the Treasury is working 
to finalize the IRS rules to allow elective pay to tribal entities for 
a ``Project'' if the tribal entity has an equity position in the 
project. If the intention is for public and/or private entities to 
include tribes in new energy projects on tribal lands, or for tribal 
entities to invest in energy projects, the regulations need to allow 
for lower tribal equity ownership in order to qualify for benefits.
    As discussed above, tribes do not have easy access to the 
significant amounts of capital that are necessary to plan, develop, 
build and maintain medium or large-scale energy projects. Additionally, 
tribes and tribal entities lack the experience and expertise to solely 
develop energy projects of this magnitude. If the elective pay benefits 
under IRC Section 45 are only available to entitles that have a 
controlling (51% or greater) interest in a ``Project'', it is highly 
unlikely that any tribal entity would have the financial wherewithal to 
take advantage of the newly created elective pay benefits.

    Potential Solution: Amend the legislation and/or call on Treasury 
to promulgate regulations requiring either a threshold of a 10% 
ownership interest or $100 million investment in a qualifying project 
to qualify for elective pay. Investment at this level would ensure that 
any project investment was above a nominal threshold, while 
incentivizing private industry to invest in the advancement of tribes 
and tribal entities, thus enabling a much-needed economic boost to 
tribes.

    As these rules are finalized, IRS must be very mindful of the 
objective these incentives were created for and very thoughtful on what 
the rules need to be to create these outcomes. Energy projects in the 
tens of millions of dollars are nice, but they do not provide the 
indirect benefits needed to help stimulate additional development. 
Energy projects in the hundreds of millions of dollars and, even more 
so, in the billions of dollars create significant long-term direct and 
indirect benefits that have real, meaningful impact. The rules must be 
finalized to incentivize private industry to include tribes and tribal 
entities in projects of this magnitude. With respect to the amount of 
financial benefit provided by the federal government, there is no 
difference between a tax credit or direct payment. There is, however, a 
massive difference in where that benefit lands. Direct payment provides 
an opportunity for those benefits to incentivize private industry to 
include tribes and tribal entities as well as ultimately providing 
additional benefits to the underdeveloped communities on tribal lands; 
whereas tax credits predominantly require the developer to monetize the 
tax credits allowing a significant percentage of the financial benefit 
to go, once again, to large corporations and financial institutions.
Office of Clean Energy Demonstration

    In May 2023, the Navajo Transitional Energy Company (``NTEC'') was 
one of eight projects awarded a funding opportunity by DOE's Office of 
Clean Energy Demonstration (``OCED''). NTEC's project is for a carbon 
capture front-end engineering design (``FEED'') study at the Four 
Corners Power Plant (``FCPP'') on the Navajo Nation. The funding will 
cover 50% of the cost of the study, or approximately $7.5 million. To 
underscore the significance of this potential project to the Navajo 
Nation, the FCPP and adjoining Navajo Mine provide over 40% of the 
annual revenue into the Navajo Nation General Fund.
    Upon announcement of being selected, OCED provided a list of the 
initial required documents and a description of the negotiation 
process. The negotiation process was stated to take up to three months 
to complete and had a deadline of August 31, 2023. The only items 
requested were responses to a Pre-Award questionnaire and an 
Organization and Financial Management review; and a project kickoff 
meeting was held where all parties were introduced, a high-level 
roadmap was provided by OCED, and a weekly progress meeting was set 
with OCED, NTEC, and Enchant Energy (``EE'').

    NTEC and EE submitted the required documents on May 19, 2023. Over 
the next five months, OCED failed to provide a schedule for 
negotiations and instead demanded additional documentation without 
guidance on what was required and provided additional limitations on 
the grant. For example, OCED requested an updated Statement of Project 
Objectives (``SOPO'') and then later informed NTEC and EE for the first 
time that no grant money could be used for assessing Enhanced Oil 
Recovery and that the SOPO would need to be revised.
    With still no definitive schedule or detailed scope provided, a 
joint meeting between OCED, including Acting Director Kelly Cummins, 
and representatives from the Navajo Nation, EE, and NTEC was held on 
November 2, 2023. During this meeting, NTEC informed OCED that they 
must start the FEED Study by December 15, 2023, or risk losing 
resources from their project partners. OCED agreed to have the FCPP 
Carbon Capture Integrated FEED cooperative agreement fully executed by 
December 15, 2023. As of February 1, 2024, NTEC is not under contract 
and OCED is still requesting new and additional information.
    NTEC started the FEED Study on December 15, 2023, but due to the 
erratic and poor communications with OCED, NTEC is currently working at 
its own financial risk to fund the entirety of the FEED Study.

    Potential Solution: Call on DOE to simplify the approval process 
for this grant and to honor the original schedule and conditions.

State Small Business Credit Initiative

    The Navajo Nation's journey toward economic diversification and 
stability has been fraught with challenges, historical setbacks, and 
environmental impacts from industries that, while once lucrative, have 
left damaging legacies. As we look to the future, it is imperative that 
we support the entrepreneurial spirit of the Dine people and nurture 
small businesses that can contribute to a robust, diversified economy.
    SSBCI funding, made available for the first time ever to tribes 
under the American Rescue Plan Act (``ARPA''), represents a critical 
opportunity for the Navajo Nation to invest in its small business 
ecosystem. Access to capital is a critical component to the growth of 
every successful company. Small businesses are the backbone of the 
American economy, and for the Navajo Nation, they do not only represent 
income and jobs, but also the preservation and advancement of Navajo 
culture, values, and community. By effectively utilizing the SSBCI 
funds, the Navajo Nation can provide the needed financial support to 
overcome this hurdle, enabling small businesses to thrive, innovate, 
and create jobs for our people.
    The anticipated receipt of our first payment from the SSBCI under 
ARPA is a step in the right direction, but admittedly it will not be 
enough. States have benefited from the SSBCI program for over a decade, 
but it was only in the last few years that the opportunity to 
participate has been extended to tribes, despite the fact that our 
needs are so much greater. We have higher unemployment that the off-
reservation economy, currently at 57% in the Navajo Nation, and our 
entrepreneurs have less access to capital as they are unable to 
leverage resources like the equity in their homes, that is frequently a 
source of start-up capital off the reservation. We hope this program 
will prove to be a good start, but as has been true of so many federal 
programs meant to empower tribal economies, we worry that the 
bureaucratic complexities and red tape will hinder our ability to reap 
the full benefits.

    Potential Solution: As the SSBCI program continues to roll out for 
tribal participants, the Navajo Nation urges the Subcommittee to be 
vigilant and to keep an open mind. As challenges with the full 
implementation of the SSBCI program are identified, we will need this 
Subcommittee to work with tribal governments and other committees to 
come up with solution in a timely manner. By doing so, Congress will be 
playing a pivotal role in promoting the economic resilience and 
prosperity of the Navajo Nation to empower our entrepreneurs and small 
businesses with the resources they need to succeed.
Conclusion

    In conclusion, I would like to reaffirm our unwavering commitment 
to building a diverse and sustainable Navajo economy and creating 
opportunities for all members of our community. While we are fully 
dedicated to this endeavor, it is essential to acknowledge the 
formidable barriers that obstruct our path at every turn. Despite these 
challenges, we remain steadfast in our determination to overcome them 
and forge ahead towards a future of economic resilience and prosperity 
for all Navajo citizens. I would once again like to express my thanks 
to this Subcommittee for the opportunity to testify on behalf of the 
Navajo Nation. I look forward to working with you to continue to 
improve the lives of the Navajo people and all of Indian Country, and 
it is my sincere hope that through our efforts we will be able to 
remove some of the barriers that stand in the way of the blossoming of 
the Navajo economy.

    Ahehee' and thank you.

                                 ______
                                 

 Questions Submitted for the Record to Mr. Justin Ahasteen, Executive 
               Director, Navajo Nation Washington Office

            Questions Submitted by Representative Westerman

    Question 1. In your written testimony, you noted that the Navajo 
Nation recognized the need to diversify its economy approximately 50 
years ago. Can you further expand on the need for economic 
diversification and how Navajo Nation has overcome obstacles regarding 
current and past diversification efforts?

    Answer. For most of our history, we have had just two major 
industries on the Nation: Agriculture and Mining. Agriculture struggles 
during a drought, which happens frequently in our region, and demand 
for our natural resources, especially coal, fluctuates widely and is no 
longer a reliable source of long-term growth. So, we need to diversify 
to ensure there are still jobs if one industry is struggling.
    To help diversify our economy, we first set up our business office, 
now housed in the Division of Economic Development, to help potential 
entrepreneurs and investors navigate the administrative hurdles to 
doing business on a reservation, including applying for a business site 
lease. Unfortunately, the process is not straight forward, and it can 
take a lot of time and money to get all the permissions to start a 
business. Add to this some of our infrastructure challenges, and it's 
hard to convince a lot of companies to open up shop in the Nation.
    To help bring in outside capital and expertise, we will also 
frequently partner with other companies. By operating as a partnership, 
we are able to help companies navigate the complexities of operating on 
tribal land, and they will also get some of the benefits available to 
tribal businesses.
    Finally, we invest directly in the economy through our tribal 
enterprises. By setting up our tribal enterprises we can at least 
guarantee some economic activity in the Nation that will hopefully act 
as an anchor to the economy and spur secondary economic development.

    Question 2. Your testimony mentioned the various jurisdictional 
barriers the tribe has had to fight when pursuing economic growth, such 
as the duplicative environmental reviews needed for paving roadways. 
What other duplicative regulations or compliance concerns would you 
highlight for the committee to look at?

    Answer. Absolutely. Taking the environmental reviews as an example, 
the National Environmental Policy Act (NEPA) covers three areas: 
Environmental Assessments (EA), Environmental Impact Statements (EIS) 
and Categorical Exclusions (CatEx). Inter-federal departmental 
deference is given by federal departments to each other but not to 
Navajo Nation departments.
    For example, the Navajo Department of Transportation (Navajo DOT) 
is currently required to complete two environmental documents to 
address the federal action of funding the project (as required by 
Federal Highway Administration (FHWA)) and the federal action of 
granting a right-of-way (as required by the Bureau of Indian Affairs 
(BIA)). The Bureau of Indian Affairs--Navajo Regional Office's Realty 
Office will not accept the FHWA CatEx document because it is not 
considered to be in a BIA format. However, the FHWA CatEx is an 
acceptable document to complete the NEPA process. It would be helpful 
if the BIA Regional Director would honor and accept Navajo DOT's 
environmental documents that are approved by FHWA.
    Now assume we got the Right of Way approved to build the road, we 
then have to go through the same process to get a Right of Way to lay 
power lines, water lines, internet, etc. Every project requires a 
separate Right of Way, even though whatever processes were good enough 
for the first Right of Way should be good enough for all of them.

    Question 3. In previous hearings, restricted fee status land models 
have been discussed, specifically whether that model could enable 
tribal development of land and natural resources at a faster pace. 
Would Navajo Nation be open to a process that would let the Nation 
place some trust land into restricted fee status for economic 
development purposes? Why or why not?

    3a) What unintended consequences should Congress seek to avoid if 
establishing more processes for tribes to move land into restricted fee 
status?

    Answer. I'm going to have to answer that question with a 
``probably''. We have discussed the possibility internally, and there 
are definitely members of our current administration and the Navajo 
Nation Council who like the idea. But anyone familiar with tribal 
politics knows how messy it can be. Liking something in theory doesn't 
mean it gets full support in practice and I imagine there will be 
debates in Council and in each local chapter community to determine 
what, if any, land they would want to move to restricted fee status. I 
will say though, that more options are better than fewer options. Even 
if we don't take advantage of the program, I would rather we have the 
option to take part than be stuck without any options.

    Question 4. Entrepreneurship can help with creating job 
opportunities, innovating, and diversifying local marketplaces, and 
many other positive results. How specifically has the Navajo Nation 
benefited from its interest in tribal entrepreneurship?

    Answer. Every successful Navajo entrepreneur helps the Nation. 
Obviously from an economic perspective it means we have more money 
coming into Navajo hands, providing for our people. But it also 
provides a sense of pride, knowing that our people built something, and 
that we didn't just rely on outside investors to get things done. I 
can't tell you how happy I am to go to a restaurant owned by a Navajo 
businesswoman, or to buy a hat made by a Navajo artist. I know of one 
Navajo entrepreneur who owns nine successful businesses.
    When she was just starting it was a family affair with her children 
and the occasional niece or nephew helping out. As one business grew, 
others were hired, and new ventures were started until she built the 
successful life that she now has. But what is perhaps more important is 
that her success has inspired other in her family and her community to 
get an education and to get experience and to start businesses of their 
own.

    Question 5. In your experience, what is the difficulty level for 
tribes to identify and access federal economic developmental programs, 
and how could Congress alleviate any issues?

    Answer. For example, the Department of Energy's Tribal Energy Loan 
Guarantee Program was established by the Energy Policy Act of 2005 to 
help tribe's build a stronger energy sector. This is a great idea. A 
strong energy sector can be a boon to a tribal economy. We should know. 
Energy was our primary source of income for years and remains an 
important part of our economy. So, the Tribal Energy Loan Guarantee 
Program seems like exactly the type of program that should be able to 
help us and many other tribes. The only problem is that, as far as we 
can tell, not a single dollar has been used from this program to 
guarantee a tribal loan for an energy-related project in the almost 20 
years of operating the program.
    This is not to say that there is no benefit from any of these 
federal programs. Clearly that program is more the exception than the 
rule. There are lots of programs that have provided immense benefit to 
Indian Country, and we are grateful to Congress for the attention it 
has given to Indian Country over the years. But sometimes a competitive 
grant program expects tribes to be operating at a level of 
sophistication that the states sometimes struggle with. How can we be 
expected to compete for development grants when we literally don't have 
reliable internet in half of our government buildings? Or cell calls 
drop when you drive five minutes out of town?
    If we want tribes to really benefit from these programs, I will say 
formula grants are always preferred to competitive grants and technical 
assistance is essential. But if these programs are really going to be 
useful to us, they need to be made available to us on our level, in a 
form that is truly accessible. And that is going to take some work, and 
it might mean visiting tribes where they live to really understand how 
things work.

                                 ______
                                 

    Ms. Hageman. Thank you for your testimony. And I don't 
think I could have said it better.
    The Chair now recognizes Ms. Sherry Rupert for 5 minutes.

STATEMENT OF SHERRY RUPERT, CEO, AMERICAN INDIAN ALASKA NATIVE 
          TOURISM ASSOCIATION, ALBUQUERQUE, NEW MEXICO

    Ms. Rupert. Madam Chair and honorable members of the 
Committee. My name is Sherry Rupert, and I am a proud Paiute 
and Washoe from Nevada.
    I am honored to appear before you today as the CEO of 
AIANTA, the American Indian Alaska Native Tourism Association.
    For over 25 years, AIANTA has been steadfast in its 
commitment to advancing cultural tourism for American Indians, 
Alaskan Natives, and Native Hawaiians.
    Our mission is clear, to support economic development and 
ensure cultural perpetuation through the growth of cultural 
tourism.
    Tourism holds immense potential for Native Nations and 
communities, providing not only economic opportunities, but 
also a means to preserve our cultural identity and share our 
rich cultural heritage.
    However, despite this potential, many Native enterprises 
face significant challenges in developing their tourism 
programming. From lack of access, to financing, to basic 
infrastructure needs, the road to building sustainable tourism 
enterprises can be arduous.
    AIANTA has been at the forefront of addressing these 
challenges, providing tailored training, marketing resources, 
and outreach efforts to support cultural tourism development.
    From Fiscal Year 2019 to 2022 alone, AIANTA directly 
reached nearly 2,700 cultural tourism partners, providing them 
with the necessary tools and resources for economic growth and 
cultural perpetuation.
    The economic impact of Indigenous tourism businesses in the 
United States is substantial, as evidenced by data from the 
U.S. Census Bureau.
    In 2019, American Indian Alaskan Native and Native Hawaiian 
hospitality businesses contributed nearly $15.7 billion to the 
U.S. economy, a 13 percent increase from 2017, providing 
188,524 jobs across the nation.
    Despite the challenges posed by a COVID-19 pandemic, 
recovery is underway, albeit slow, with overseas visitors to 
American Indian communities increasing from 321,000 in 1921, 
during COVID to just over a million in 2022, and in 2019, there 
were over 2 million that were coming to our American Indian 
communities, so it is slow.
    Yet, despite the undeniable impact of Indigenous tourism in 
the U.S. economy, Native Nations and communities remain largely 
excluded from mainstream tourism support structures. This 
exclusion has been particularly evident in the distribution of 
relief funding during the COVID-19 pandemic, where Native 
entities received disproportionately little support compared to 
the other sectors of the industry.
    The Native American Tourism and Improving Visitor 
Experience Act, or NATIVE Act, was a crucial step forward in 
recognizing the importance of Native tourism and improving 
collaboration between Federal agencies and Native Nations and 
communities.
    However, its full potential has yet to be realized. 
Clarifications and revisions are needed to ensure that the 
Act's appropriations are utilized effectively and that Native 
voices are truly heard and are leading the effort in tourism 
initiatives.
    AIANTA recommends a renewed commitment to equity and 
inclusion in the tourism industry, with a focus on direct 
investments in technical assistance and training specific to 
cultural tourism.
    We also advocate for greater support of the Department of 
the Interior and the Department of Commerce in the 
implementation of the NATIVE Act, ensuring that Native Nations 
and communities have a seat at the table in one of the largest 
industries in this country.
    Tourism, when done well, has the power to uplift 
communities, preserve cultural identity and traditions, and 
drive economic growth. AIANTA stands ready to work alongside 
you to build a brighter future for Native Nations and 
communities through the full implementation of the NATIVE Act.
    Thank you for your time today, and I am here to answer any 
questions.

    [The prepared statement of Ms. Rupert follows:]
   Prepared Statement of Sherry L. Rupert, Chief Executive Officer, 
           American Indian Alaska Native Tourism Association

    Subcommittee Chair Hageman, Vice Chair Gonzalez-Coloon and members 
of the committee, thank you for receiving testimony on behalf of the 
American Indian Alaska Native Tourism Association, Inc. (``AIANTA''). 
We appreciate the opportunity to express our priorities to meet the 
needs of tourism and economic development across Native Nations and 
communities across the United States. We would particularly like to 
address the Native American Tourism and Improving Visitor Experience 
Act (``NATIVE Act'').
TOP LINES

    Revision to the Native American Tourism and Improving Visitor 
Experience (NATIVE) Act is being requested to support a permanent role 
for cultural tourism to support economic diversification for American 
Indian Tribes and Native Hawaiian organizations.
AMERICAN INDIAN ALASKA NATIVE TOURISM ASSOCIATION

    AIANTA is the only national organization specifically dedicated to 
advancing cultural tourism for American Indians, Alaska Natives and 
Native Hawaiians. For over 25 years, AIANTA has provided technical 
assistance and training to American Indians, Alaska Natives and Native 
Hawaiians to support economic development and to ensure cultural 
perpetuation through the development and growth of cultural tourism. 
AIANTA works with American Indians, Alaska Natives and Native Hawaiians 
to develop, grow and sustain cultural tourism enterprises, businesses 
and organizations.
    AIANTA, an all Native-led nonprofit, serves all 574 federally 
recognized tribes, tribal organizations and Native Hawaiian 
organizations to support cultural tourism development and growth 
nationwide. We are the only organization specifically dedicated to 
advancing Native cultural tourism as a tool to perpetuate and protect 
our cultural identity while providing economic opportunities within 
Native Nations and communities.
    For many Native Nations and communities, tourism is a new and 
emerging industry and Native Nations and communities do not have a 
robust, fully trained workforce to meet the demand. Without inclusion 
in the existing, layered tourism support structures, each sovereign 
native nation, village and community is forced to develop tourism 
plans, programming and infrastructure from scratch. This process is 
happening in a world where tourism is already occurring with 
ramifications both cultural, environmental and economic. Even for those 
tribes with casinos, the infrastructure and planning are not always in 
place to diversify funding and/or to fully develop tourism 
opportunities that reflect, protect and perpetuate culture and Native 
landscapes.
    AIANTA's priorities are (1) to provide technical assistance and 
training, research, and publications to American Indian, Alaska Native 
and Native Hawaiian communities engaged in tourism and hospitality; 2) 
to facilitate conversations with the Native communities, federal 
agencies, non-profit associations, and elected officials on the 
economic and cultural importance of a healthy hospitality industry; (3) 
to highlight the importance of visiting authentic Native destinations, 
including cultural, heritage, historic, and artistic sites; and (4) to 
generate awareness, interest and demand for these destinations with 
domestic and international travelers, the travel trade and the media.
BUILDING TOURISM IN NATIVE NATIONS AND COMMUNITIES

    Native enterprises and businesses face layered challenges in 
building out their cultural tourism programming ranging from lack of 
access to financing to basic infrastructure needs. For the last 25 
years, AIANTA has provided outreach, tailored trainings, marketing and 
resources alongside elevating cultural tourism to the national level 
and to the industry. This includes AIANTA's support and role as 
facilitator (2019) of the Native American Tourism and Improving Visitor 
Experience (NATIVE) Act (Section 4d). From FY 2019-2022, AIANTA 
provided direct outreach and resources to 2,665 individual contacts, 
electronic outreach with 2,095,252 sent and 3,677 participants in 
training supporting economic development and cultural perpetuation. 
(AIANTA's Report to Congress as provided to the Office of Indian 
Economic Development).
    Native Nations and communities also face inconsistent inclusion in 
the tourism infrastructure designed to support tourism development. 
Tourism marketing and support is funded in the United States through 
taxes, fees and general fund allocations. Due to the unique status of 
American Indians and Alaska Natives in the United States, tourism 
systems are not fully and consistently in place to support cultural 
tourism destinations and product. Specifically, Native Nations are not 
supported by local, regional or national destination marketing 
organizations and/or the tourism industry because they often do not 
contribute to the fees and tax support systems that fund tourism 
development and growth. This is despite the significant economic impact 
of Native Nations and communities on the economy.

    In 2021, AIANTA, in partnership with SMS Research, released a 
report on the economic impact of Indigenous tourism businesses in the 
United States based on analysis of 2017 Census Data. https://
www.aianta.org/research/economic-impact/. This data points to the 
economic impact, with American Indian, Alaska Native and Native 
Hawaiian hospitality businesses contributing nearly $14 billion to the 
U.S. economy (2017 U.S. Census data) and based on preliminary review of 
2019 Annual Business Survey, the economic impact grew:

     In 2019, the 120,869 recorded AIANNH firms in the tourism 
            sector was three times more than in 2017.

     Of the 120,869 AIANNH-owned tourism firms, most (94%) were 
            self-employed individuals (113,200 firms without paid 
            employees), while 7,669 (6%) were firms with paid 
            employees.

     AIANNH-owned firms in the tourism sector directly provided 
            188,524 jobs across the U.S. in 2019.

     In 2019, annual sales of AIANNH-owned tourism firms 
            contributed $15.7B to the U.S. economy, a 13% increase from 
            2017.

    As demonstrated by the above data, prior to the COVID-19 pandemic, 
tourism was a leading opportunity for jobs and economic development in 
Native Nations and communities. In some rural and remote communities, 
it is one of the only viable opportunities for household income.
    Although Census data is not yet available specifically detailing 
the impact of COVID-19, the international visitation data points to the 
decline in visitation. According to U.S. Department of Commerce, 
approximately 1.7 million overseas visitors (4.4% of total market 
share) traveled to an American Indian Community in 2019. International 
visitors are good for the Native Nations and communities they visit and 
for the entire tourism economy because they stay longer in the U.S. 
than the average overseas traveler and visit more destinations (2019 
U.S. Travel and Tourism Statistics, National Travel and Tourism Office, 
U.S. Dept of Commerce). In 2020, the impact of COVID-19 was felt 
dramatically in Native Nations and communities with approximately 
251,000 overseas visitors (3.3% of market share)--an 85% drop in 
visitors.
    Significantly, the ramifications of lack of inclusion in U.S. 
Tourism systems became painfully clear when the EDA's 2021 non-
competitive Travel, Tourism and Outdoor Recreation Recovery Act 
funding, designed to aid recovery from COVID-19 shutdowns, went to 
States and territories to support tourism marketing, infrastructure, 
workforce and projects to rejuvenate leisure, business and 
international travel with none of the $510 million of the relief 
funding being set aside for Native Nations and communities (TTOR_Fact 
Sheet.pdf (eda.gov). While the rest of the tourism industry is in full 
recovery mode with the pandemic fully in the rear-view mirror, Native 
Nations and communities are left to rebuild on their own. Based on the 
U.S. Department of Commerce Visitation to American Indian Community 
data, recovery is slowly underway with 321,000 overseas visitors in 
2021 (3.5% of market share) and 1,006,000 overseas visitors in 2022 
(4.2% of market share).
    By being consistently left out of the tourism support structures, 
including relief funding, Native Nations and communities are not on an 
even playing field with the entirety of the U.S. tourism 
infrastructure. Through educational forums and outreach, AIANTA is 
working to ensure the systems gap is addressed through industry access, 
capacity building and marketing support for full participation in 
tourism.
    Tourism is not a go it alone endeavor--it is inherently reliant on 
connected, collaborative systems. AIANTA is working to fundamentally 
shift and improve the operating environment for underrepresented 
entrepreneurs--specifically Native-owned and Native-led cultural 
tourism operations and enterprises. AIANTA is the only organization 
specifically dedicated to advancing Native cultural tourism as a tool 
for cultural perpetuation. We work across the cultural tourism 
continuum--from product development and partnership building to 
marketing and promoting Native tourism destinations and product, 
domestically and internationally.
NATIVE AMERICAN TOURISM AND IMPROVING VISITOR EXPERIENCE (NATIVE) ACT

    This committee is critical to helping build Native tourism 
economies.

    Clarification on the intent of the NATIVE Act is needed to ensure 
that the Appropriations designated by Congress are being utilized for 
their intended purposes.
    The purpose of the Native American Tourism and Improving Visitor 
Experience (NATIVE) Act, Public Law 114-221, is ``To enhance and 
integrate Native American tourism, empower Native American communities, 
increase coordination and collaboration between Federal tourism assets, 
and expand heritage and cultural tourism opportunities in the United 
States.'' The NATIVE Act outlines how federal agencies engaged in 
recreation and tourism shall include Indian Tribes, tribal 
organizations and Native Hawaiian Organizations in management plans and 
tourism initiatives in Section 2:

    The purposes of the Native American Tourism and Improving Visitor 
Experience (NATIVE) Act, Public Law 114-221, as listed in Section 2, 
are as follows:

  (1)  to enhance and integrate Native American tourism----

          (A) to empower Native American communities; and

          (B) to advance the National Travel and Tourism Strategy;

  (2)  to increase coordination and collaboration between Federal 
            tourism assets to support Native American tourism and 
            bolster recreational travel and tourism;

  (3)  to expand heritage and cultural tourism opportunities in the 
            United States to spur economic development, create jobs, 
            and increase tourism revenues;

  (4)  to enhance and improve self-determination and self-governance 
            capabilities in the Native American community and to 
            promote greater self-sufficiency;

  (5)  to encourage Indian tribes, tribal organizations, and Native 
            Hawaiian organizations to engage more fully in Native 
            American tourism activities to increase visitation to rural 
            and remote areas in the United States that are too 
            difficult to access or are unknown to domestic travelers 
            and international tourists;

  (6)  <> to provide grants, loans, and technical 
            assistance to Indian tribes, tribal organizations, and 
            Native Hawaiian organizations that will----

          (A) spur important infrastructure development;

          (B) increase tourism capacity; and

          (C) elevate living standards in Native American communities; 
        and

  (7)  to support the development of technologically innovative 
            projects that will incorporate recreational travel and 
            tourism information and data from Federal assets to improve 
            the visitor experience.

    The NATIVE Act also identifies the role of ``an entity or 
organization with a demonstrated record in tribal communities of 
defining, introducing, developing and sustaining American Indian, 
Alaska Native and Native Hawaiian tourism and related activities in a 
manner that respects and honors native traditions and values'' to enter 
into a memorandum of understanding or cooperative agreement with the 
Secretary of the Interior and the Secretary of Commerce to identify 
areas where technical assistance is needed and to provide a means of 
delivery and coordinate delivery of the assistance. (130 STAT 849, Sec 
4).

    In September 2018, AIANTA signed a memorandum of understanding with 
the Department of Interior and the Department of Commerce ``to 
formalize a role for AIANTA, pursuant to section 4(d) of the [NATIVE] 
Act, and strengthen collaboration and coordination related to travel 
and tourism on Federal and Tribal Lands.'' (See MOU_final.pdf 
(aianta.org))
    In March 2019, AIANTA entered into a five-year Cooperative 
Agreement A19AC00017 with the Bureau of Indian Affairs (BIA). A 
collaborative workplan was developed by the DOI, DOC and AIANTA in 
August 2019 for implementation of the NATIVE Act specific to the 
following goals:

    Goal 1: Identify areas where technical assistance is needed

    Goal 2: Coordination and delivery of technical assistance

    To support implementation of the NATIVE Act, Congress has 
appropriated $19,500,000 through the BIA/Office of Indian Economic 
Development for the coordination of the identification and delivery of 
technical assistance to Indian Tribes, Tribal Organizations and Native 
Hawaiian Organizations and to provide grants (see NATIVE Act, Section 
2(6) above).

    Although listed as a grantee, AIANTA is the organization designated 
to facilitate the NATIVE Act and is not a grantee, but rather a partner 
in implementation efforts. AIANTA received FY2018 and FY2019 
appropriation funding totaling $4,400,000 for implementation of the 
goals set in support of the NATIVE Act and as outlined in the five-year 
Cooperative Agreement for the identification and delivery of technical 
assistance. From March 2019-July 2022, AIANTA has distributed over 2.45 
million electronic messages/outreach and resources; provided direct 
outreach and resources to 2,665 cultural tourism partners; and 
developed and provided 139 tailored, responsive cultural tourism 
trainings to 1,418 cultural tourism partners. (AIANTA's Report to 
Congress provided to OIED).

    The breakdown of how the appropriated funds were spent as detailed 
in the Report to the Senate Committee on Indian Affairs and the 
Committee on Natural Resources of the House of Representatives FY 2020-
2022 provides insight on how the funds have gone beyond the intent of 
the NATIVE Act. Including Administration Costs utilized internally by 
the BIA/OIED totaling $4,624,000--more funding than was dedicated to 
the non-profit agency identified by the Department of Interior and the 
Department of Commerce to act to identify and provide technical 
assistance and training as required in the NATIVE Act.

    Additional BIA/OIED funding went to Pilot Projects totaling 
$3,928,002 with $1,725,011 going to an academic institution for 
projects in North Dakota, South Dakota and for an International Forum 
for Indigenous tourism (North and South America); $818,022 went to an 
additional academic institution for projects in Virginia and Montana; 
$500,000 went to a tribal organization to provide technical assistance 
(duplicating efforts of AIANTA); with the remaining $884,000 going to 
other tribal entities. BIA/OIED also provided $7,088,553 for their 
Tribal Tourism Grant Program.

    AIANTA recommends a full and consistent commitment to equity and 
inclusion of American Indians, Alaska Natives and Native Hawaiians in 
the United States tourism system. AIANTA encourages equitable 
distribution of tourism funding through direct investments in the 
identification and delivery of technical assistance and training 
specific to cultural tourism facilitated by ``an entity or organization 
with a demonstrated record in tribal communities of defining, 
introducing, developing, and sustaining American Indian, Alaska Native, 
and Native Hawaiian tourism and related activities in a manner that 
respects and honors native traditions and values'' (Public Law 114-221, 
Sec. 4(d)(1)).

    Revision/clarification to the NATIVE Act is being requested. AIANTA 
is requesting that additional language be added to support the 
implementation of the NATIVE Act to be added modeled after NAHASDA to 
support consistent support of the growth of economic opportunities in 
Native Nations and communities through engagement in the cultural 
tourism/hospitality/ recreation sector. It is also critical that both 
the Department of Interior and the Department of Commerce are actively 
involved in implementation of the NATIVE Act.

    Further, it was known that the federal government does not have 
expertise in the tourism industry, but it does however have expertise 
in giving out grants. The NATIVE Act was intended to ensure that a 
Native non-profit with experience and the expertise in cultural tourism 
collaborate with Tribes, Tribal Organizations and Native Hawaiian 
Organizations across the country so they could determine themselves 
what they would be willing to share. That non-profit would be better 
positioned in the industry and within the Native communities to do this 
work; adept at navigating the intricate and complex systems and 
relationships that make up the tourism industry. This model was to play 
a critical role in ensuring Native voices are included in the economic 
opportunities created by one of the largest service sectors in the 
world.
    Replacement language for Section 4(d) as noted in Section (d)(3):

d) TECHNICAL ASSISTANCE.----

  (1)  IN GENERAL.--The Secretary of the Interior, in consultation with 
            the Secretary of Commerce, shall enter into a memorandum of 
            understanding or cooperative agreement with an entity or 
            organization with a demonstrated record in tribal 
            communities of defining, introducing, developing, and 
            sustaining American Indian, Alaska Native, and Native 
            Hawaiian tourism and related activities in a manner that 
            respects and honors native traditions and values.

  (2)  COORDINATION.--The memorandum of understanding or cooperative 
            agreement described in paragraph (1) shall formalize a role 
            for the organization or entity to serve as a facilitator 
            between the Secretary of the Interior and the Secretary of 
            Commerce and the Indian tribes, tribal organizations, and 
            Native Hawaiian organizations----

          (A)  to identify areas where technical assistance is needed 
        through consultations with Indian tribes, tribal organizations, 
        and Native Hawaiian organizations to empower the Indian tribes, 
        tribal organizations, and Native Hawaiian organizations to 
        participate fully in the tourism Industry; and

          (B)  to provide a means for the delivery of technical 
        assistance and coordinate the delivery of the assistance to 
        Indian tribes, tribal organizations, and Native Hawaiian 
        organizations in collaboration with the Secretary of the 
        Interior, the Secretary of Commerce, and other entities with 
        distinctive experience, as appropriate.

  (3)  FUNDING.--There are authorized to be appropriated through each 
            of the named agencies, including but not limited to, the 
            Department of the Interior and the Department of Commerce, 
            for assistance for the organization or entity in paragraph 
            (1) such sums as may be necessary for each of the fiscal 
            years of allocation. In addition, subject to the 
            availability of appropriations, the head of each Federal 
            agency, including the Secretary of the Interior, the 
            Secretary of Commerce, the Secretary of Transportation, the 
            Secretary of Agriculture, the Secretary of Health and Human 
            Services, and the Secretary of Labor shall obligate any 
            funds made available to the head of the agency to cover 
            implementation incurred by the organization or entity 
            described in paragraph (1) in carrying out programs or 
            activities of the agency.

CONCLUSION

    When done well, tourism and related economic development provide 
social and economic stability to the most remote rural communities and 
mainstream city neighborhoods, complementing the effort of American 
Indian, Alaska Native and Native Hawaiian enterprises, businesses, 
organizations, and agencies working to build economies and contribute 
to the growth of the U.S. tourism industry. Tourism, including 
agritourism, outdoor recreation, eco-tourism, astro-tourism and more 
brings revenue to Native Nations and communities providing jobs, 
localized investments and the perpetuation of cultural practices; all 
of which contributes to the resiliency of Native Nations and 
communities. AIANTA stands ready to help rebuild Native Nations and 
communities and supports full implementation of the NATIVE Act to build 
a brighter future.

                                 ______
                                 

Questions Submitted for the Record to Ms. Sherry Rupert, CEO, American 
                Indian Alaska Native Tourism Association

            Questions Submitted by Representative Westerman

    Question 1. Please list and describe the changes that need to be 
made to any federal program to ensure that tribal-led tourism and the 
larger U.S. tourism industry are working together to promote tourism in 
the United States.

    Answer. In response to your inquiry regarding changes needed in 
federal programs to facilitate collaboration between tribal-led tourism 
and the broader U.S. tourism industry, several key adjustments are 
warranted.
    Firstly, with regard to the Native American Tourism and Improving 
Visitor Experience (NATIVE) Act, it is imperative that the designated 
entity providing technical assistance and training to tribes in 
Indigenous tourism be an expert in the field. This ensures that tribes 
receive tailored support and guidance from knowledgeable professionals 
who understand the unique challenges and opportunities within 
Indigenous tourism.
    Additionally, within the Department of the Interior, cultural 
tourism should be recognized and treated as a partner rather than 
solely as a grantee. This shift in perspective acknowledges the 
valuable contributions of cultural tourism initiatives and fosters a 
collaborative approach between tribes, cultural tourism entities, and 
other stakeholders. By treating cultural tourism as a partner, federal 
programs can better leverage tribal expertise and resources to promote 
tourism in the United States effectively.
    Furthermore, it is essential for federal programs to prioritize 
meaningful engagement and collaboration with tribal communities 
throughout the development and implementation of tourism initiatives. 
This includes consulting tribes on decision-making processes, 
incorporating traditional knowledge and cultural perspectives into 
tourism strategies, and ensuring that tribal voices are heard and 
respected.
    Overall, by implementing these changes and fostering genuine 
partnerships between tribal-led tourism and the larger U.S. tourism 
industry, federal programs can enhance their effectiveness in promoting 
tourism in the United States while respecting and honoring Indigenous 
cultures and traditions.

    Question 2. Can you expand on your written testimony where you 
mentioned how you've seen the Department of Commerce and Department of 
the Interior work together--or not work together--on Native tourism. 
Are there any areas or programs where Congress should instruct them to 
work together?

    Answer. In response to your inquiry regarding the collaboration 
between the Department of Commerce and the Department of the Interior 
in native tourism initiatives, it is evident that both agencies play 
pivotal roles in implementing the Native American Tourism and Improving 
Visitor Experience (NATIVE) Act. However, we have observed challenges 
in their collaboration, particularly concerning the allocation of 
resources.
    It has come to our attention that the Department of Commerce has 
not received appropriations to facilitate the implementation of the 
NATIVE Act, despite its designation as one of the primary agencies 
responsible for this task. This deficiency in funding hampers the 
effective execution of the Act and impedes the collaborative efforts 
between the two departments.
    To address this issue, we recommend that Congress instructs both 
the Department of the Interior and the Department of Commerce to work 
together more closely, particularly in securing appropriations for 
native tourism initiatives. Specifically, we advocate for an amendment 
to Section 4(d)(3) of the NATIVE Act, which pertains to funding, to 
include appropriations for both agencies. By ensuring adequate funding 
for both departments, Congress can foster stronger collaboration and 
enhance the implementation of the NATIVE Act to benefit native tourism 
initiatives.

    Question 3. Your written testimony mentioned that further technical 
assistance is needed for tribes that are working to establish tourism 
businesses in their communities. Can you expand on that?

    3a) What technical assistance does AIANTA currently provide and 
what expertise does AIANTA want to provide for the future?

    Answer. In alignment with our previous testimony, we emphasize that 
the American Indian Alaska Native Tourism Association (AIANTA) stands 
as the singular national Native organization exclusively devoted to 
advancing cultural tourism for American Indians, Alaska Natives, and 
Native Hawaiians. For a span exceeding 25 years, AIANTA has diligently 
furnished technical aid and training to these communities, fostering 
economic development, and safeguarding cultural heritage through the 
fostering and expansion of cultural tourism initiatives.
    Throughout this duration, AIANTA has cultivated partnerships, 
forged relationships, and established an extensive network within the 
United States tourism sector, traversing the realms of travel trade, 
media, and now extending globally as a founding collaborator in the 
establishment of Destination Original International Tourism, a Global 
Indigenous Collective. Guided by international Indigenous tourism 
leaders, this collective endeavors to assert leadership in the 
cultivation and promotion of authentic Indigenous tourism destinations 
via innovative partnerships.
    Presently, AIANTA actively engages with the 574 Tribal Nations 
nationwide, alongside tribal organizations and small Native-owned 
enterprises operating within the Indigenous tourism sector. We provide 
vital training, technical assistance, and resources, including both 
training opportunities and funding avenues, through direct outreach, 
webinars, training sessions, and an annual conference dedicated to 
Indigenous Tourism. Additionally, AIANTA offers a professional 
certificate in sustainability, empowering stakeholders to implement 
sustainable practices within their tourism enterprises.
    Our immediate focal point revolves around evaluating the readiness 
of these enterprises for market and export endeavors. It is our earnest 
desire to persist in offering training programs tailored to bridge the 
existing gaps for those businesses not yet primed for the visitor 
marketplace. Furthermore, upon achieving readiness for engagement with 
the visitor marketplace, these enterprises necessitate robust promotion 
both domestically and internationally, to apprise potential visitors of 
their presence and the transformative experiences and destinations they 
offer.
    Thank you for your attention to our ongoing efforts in advancing 
Indigenous tourism initiatives.

    Question 4. In your written testimony, you touched on Native 
nations and communities slowly recovering from the impact COVID-19 
shutdowns had on tourism. How can Congress support Tribal Nations and 
communities to ensure resiliency in the future?

    Answer. In response to your inquiry regarding the recovery of 
Native nations and communities from the adverse impacts of COVID-19 
shutdowns on tourism, we appreciate the opportunity to provide insights 
on how Congress can extend support to ensure resilience in the future.
    Congress can further aid Native Nations and communities in their 
post-COVID recovery by maintaining appropriations for tourism capacity 
building. Such funding should be comprehensive, encompassing support 
for program development and tourism projects to bolster tourism 
infrastructure.
    Moreover, a crucial aspect that warrants attention is the need for 
robust promotion, both domestically and internationally, to raise 
awareness among potential visitors of the rich cultural experiences 
offered by Native Nations and communities. Therefore, we urge your 
support for a legislative solution that integrates Indigenous Tourism 
into federal funding mechanisms in the event of similar crises in the 
future.
    The travel and tourism sector demonstrated unprecedented 
mobilization efforts to safeguard travel infrastructure and prevent 
systemic collapse in the face of the profound disruptions caused by 
COVID-19. Historically, this industry has shown adeptness in 
acknowledging and addressing the inherent challenges of tourism, 
exemplified by initiatives like the establishment of Brand USA. 
Recognizing the imperative for the United States to maintain 
competitiveness in the multi-billion-dollar visitor market, Brand USA 
was developed to foster collaborative and cohesive branding and 
marketing strategies on a global scale. Funded by Travel Promotion Fund 
visitor fees, Brand USA has yielded a substantial annual economic 
impact of $56 billion.
    In line with these successful models, AIANTA proposes the enactment 
of separate legislation, akin to Brand USA and the Travel Promotion Act 
of 2009, to support a sustainable, centralized approach to marketing 
and nurturing tourism businesses and employment opportunities within 
Native Nations and communities. This legislation would address the 
distinctive challenges faced by American Indians, Alaska Natives, and 
Native Hawaiians in fostering and enhancing cultural tourism programs 
and products.
    The envisioned legislation would establish a native-led nonprofit 
entity with the mission to define, introduce, grow, and sustain 
American Indian, Alaska Native, and Native Hawaiian tourism, while also 
providing direct funding for cultural tourism development. By 
instituting a dedicated revenue source, such as the Travel Promotion 
Fund visitor fee, Native Nations and communities will receive tailored 
support for cultural tourism initiatives alongside marketing assistance 
to promote their offerings domestically and globally.
    Thank you for considering our recommendations to fortify the 
resilience of Native nations and communities in the tourism sector.

    Question 5. In your experience, what is the difficulty level for 
tribes to identify and access federal economic developmental programs, 
and how could Congress alleviate any issues?

    Answer. In our experience, tribes often encounter significant 
challenges in identifying and accessing federal economic development 
programs. These difficulties stem from various factors, including 
complex eligibility criteria, bureaucratic barriers, and limited 
resources for navigating the application process. One notable obstacle 
is the requirement for matching funds, which poses a significant 
barrier for tribes with constrained financial capacities. As a result, 
many tribes are unable to leverage federal economic development 
programs to their full potential.
    To alleviate these issues, Congress could implement measures such 
as establishing set-aside funding specifically designated for tribal 
economic development initiatives. This approach would provide tribes 
with dedicated resources tailored to their unique needs, eliminating 
the burden of matching funds and ensuring equitable access to economic 
development opportunities. Additionally, streamlining application 
procedures, enhancing technical assistance and outreach efforts, and 
fostering partnerships between federal agencies and tribal entities 
could further facilitate access to federal programs for tribes.
    By implementing these measures, Congress can empower tribes to 
overcome barriers and effectively utilize federal economic development 
programs to promote sustainable economic growth and prosperity within 
their communities.

                                 ______
                                 

    Ms. Hageman. Thank you for that very informative testimony.
    The Chair now recognizes Mr. Bacon for 5 minutes.

  STATEMENT OF RAYMOND BACON, EXECUTIVE DIRECTOR OF THE YUROK 
  TRIBE ECONOMIC DEVELOPMENT CORPORATION, KLAMATH, CALIFORNIA

    Mr. Bacon. Chairman Hageman, Ranking Member Leger 
Fernandez, members of the Subcommittee, thank you for inviting 
me to speak on behalf of the Yurok Tribe's Economic Development 
Corporation.
    My name is Raymond Bacon. I am an enrolled member of the 
Yurok Tribe. I have served as Director of Economic Development 
Corporation for 4 years and have worked in the tribal gaming 
industry for approximately 30.
    Economic diversification is critical for developing 
prosperous tribal economies. Through strategic investments, 
tribal communities can leverage our unique cultural heritage, 
natural resources, and local expertise to explore new 
industries.
    This diversification not only reduces reliance on volatile 
markets, but also creates employment opportunities, stimulates 
local economic growth, and empowers tribal communities to 
achieve greater self-sufficiency.
    In utilizing public and private partnerships to access 
technical assistance, funding, and market opportunities, we can 
focus on creating long-term prosperity for generations to come.
    As California's largest Native American tribe, we operate 
13 businesses with four sister corporations, and the success of 
earlier investments like our hotel has allowed the Tribe to 
pivot to several other economic development projects. So, I 
have firsthand knowledge of the benefits a diverse tribal 
economy can bring.
    Recently, we expanded our business operations to diversify 
even further. These new initiatives include a golf course, 
LiDAR mapping via Yurok Aviation, and our fuel mart division.
    The fuel mart division is a prime example of how we can 
successfully partner with other agencies and entities to 
accomplish shared goals. Here, we leverage the EDA funding to 
help the realization of an $8 million fuel mart travel center 
in the heart of Yurok ancestral territory.
    This significant investment both demonstrates our 
commitment to economic growth and emphasizes our dedication to 
preserving and revitalizing our ancestral lands.
    Another exciting venture for the corporation is the 
successful developing of our ecotourism infrastructure. In 
Yurok country, our visitor center serves as a hub and a 
platform to educate visitors on Yurok culture, affirming our 
presence in our ancestral territory.
    On average, thousands of travelers pass through our visitor 
center each year. Through this, we have been able to establish 
a business allowing visitors to take a journey back in time in 
a traditional Yurok dugout canoe.
    This immersive experience offers guests a firsthand look at 
our cultural heritage and deep connection to the Klamath River 
while also promoting ecotourism.
    And again, our partnership with the Federal Government 
played an important role in the success of this initiative. Our 
center received direct funding from the Scenic Byways Program.
    In addition to sharing our heritage and lands through 
ecotourism, harnessing our natural resources into renewable 
energy also plays a significant role in supporting our economic 
diversification.
    For example, the Yurok Tribe has recently partnered with 
CalFresh to install solar energy systems for enhancing food 
storage capacity in the upper region of our reservation.
    And beyond renewable energy, tribes can also continue to 
leverage their fish and wildlife. Salmon from the Klamath River 
has long been a vital subsistence resource for our Tribe, 
serving as a primary food source and holding significant 
cultural importance.
    Ensuring ongoing access to salmon and preserving the 
Klamath River are central components of our Tribe's 
diversification efforts.
    We are proud of our Tribe's long history as experts in 
river restoration. And due to the decline in salmon populations 
in our waterways, we have directed great focus and resources to 
the Yurok Construction Corporation to conduct vital restoration 
work on the Klamath and the Sacramento Rivers and Redwood 
Creek.
    Tribes need economies that can quickly adapt to ever-
changing economic conditions, sustain and employ their 
communities, and help preserve their people's cultural 
identities.
    In focusing on building diverse tribal economies, we can 
create a resilient foundation that can weather the otherwise 
turbulent impact of single market failures and foster 
sustainable growth for the future of our Native communities.
    Thank you, and I look forward to answering your questions.

    [The prepared statement of Mr. Bacon follows:]
 Prepared Statement of Raymond Bacon, Executive Director, Yurok Tribe 
                    Economic Development Corporation

I. Introduction

    Chairman Hageman, Ranking Member Leger Fernandez, members of the 
Subcommittee, thank you for inviting me to speak on behalf of the Yurok 
Tribe's Economic Development Corporation.
    My name is Raymond Bacon. I am an enrolled member of the Yurok 
Tribe. I have served as Director of the Economic Development 
Corporation for 4 years and have worked in the tribal gaming industry 
for approximately 30 years.
    Economic diversification is critical for developing prosperous 
tribal economies. Through strategic investments, tribal communities can 
leverage our unique cultural heritage, natural resources, and local 
expertise to explore new industries such as eco-tourism, renewable 
energy, and fisheries.
II. Prioritizing Economic Diversification Has Broad Positive Impacts On 
        Tribal Communities And Their Neighbors

    By prioritizing infrastructure and entrepreneurial initiatives, 
tribes can attract outside investment while simultaneously preserving 
our cultural identity and environmental integrity. This diversification 
not only reduces reliance on volatile industries but also creates 
employment opportunities and stimulates local economic growth, thereby 
empowering tribal communities to achieve greater self-sufficiency and 
resilience against economic downturns.
    Moreover, economic diversification in tribal economies stimulates 
intergenerational wealth accumulation and promotes social cohesion 
within communities. By developing a spirit of innovation and 
entrepreneurship, tribes can empower our youth to explore new career 
paths and contribute to the sustainable development of our ancestral 
lands. Education and vocational training programs tailored to local 
needs and opportunities can equip tribal members with the skills and 
knowledge needed to thrive in emerging industries.
    Partnerships with government agencies, private businesses, and 
nonprofit organizations can help provide tribes with access to 
technical assistance, funding, and market opportunities. Through these 
collaborative efforts and strategic planning, our tribal economies can 
focus on creating long-term prosperity and well-being for future 
generations.
    Additionally, the benefits resulting from diversification efforts 
transcend the reservation and allows for positive economic impact to 
snowball into local economies. For example, our Tribe's economic feats 
have allowed for additional spending in the local communities of Del 
Norte and Humboldt counties. So, not only is diversification a 
financially prudent agenda for the tribe, but it also allows us to be 
good neighbors to adjacent communities as well.
III. The Yurok Tribe Has Benefited Greatly From Diversification Efforts

    I would like to offer a few examples of the benefits 
diversification offers my own Tribe, to help demonstrate the 
opportunities that are unlocked when tribes pursue diverse economic 
strategies and initiatives. As California's largest Native American 
Tribe, we have been diligent in creating and operating 13 businesses 
with four sister corporations to provide our people with several 
revenue sources. The success of earlier investments, such as with our 
brewery, has allowed the tribe to pivot to other economic development 
projects. So, I have first-hand knowledge of the benefits that a 
diverse tribal economy can bring.
    Recently, we have expanded our business operations to diversify 
even further. These new initiatives include a golf course, LiDAR 
mapping (Yurok Aviation), and, notably, our fuel mart division. The 
fuel mart division is a prime example of how we successfully partner 
with other agencies and entities to accomplish important shared goals. 
Our fuel mart will enhance economic development with support from EDA 
funding. The realization of an $8 million fuel mart travel center in 
the heart of Yurok ancestral territory not only demonstrates our 
commitment to economic growth but also emphasizes our dedication to 
preserving and revitalizing our ancestral lands.
    This venture provides essential services for our community and 
travelers while also creating jobs and generating revenue. It sets the 
stage for further economic development initiatives, showcasing the 
potential for sustainable growth within Indigenous territories. The 
success of this endeavor underscores the importance of strategic 
partnerships and funding support from organizations like the EDA in 
achieving our goals.
    Additionally, I should highlight the ongoing efforts of the Yurok 
Telecommunications Corporation in significantly expanding broadband 
accessibility in the region. Through leveraging support from the 
National Telecommunications and Information Administration, we are 
working to deploy 62 miles of middle-mile fiber optic cable from Orrick 
to Crescent City. This represents one of the largest technological 
advancements in the region, as we expect the project to bring high 
speed broadband to nearly 1,000 homes, 110 businesses, and 18 anchor 
institutions. This groundbreaking project is a testament to our tribe's 
historical endeavor, made possible through strategic partnerships and 
our tribe's economic stability and sophistication.
IV. The Tribe Continues To Leverage Eco-Tourism

    Another exciting development for the Corporation has been the 
success of our investments in developing our eco-tourism 
infrastructure. Eco-tourism can be a way for Indigenous communities to 
showcase their culture, traditions, and natural resources to visitors 
while promoting conservation and sustainable practices.
    In Yurok Country, our visitor center serves as a hub and platform 
to educate visitors on Yurok culture, affirming our presence in our 
ancestral territory. And again, our partnership with the federal 
government played an important role in the success of that initiative: 
our center received direct funding from the scenic byways program.
    On average, thousands of travelers pass through our visitor center 
each year, providing us with a unique opportunity to educate them about 
Yurok Country. Additionally, we've established a business allowing 
visitors to take a journey back in time in a traditional redwood dugout 
canoe. This immersive experience offers guests a firsthand look at our 
cultural heritage and deep connection to the Klamath River, while also 
promoting eco-tourism.
V. Renewable Energy And The Environment Are Integral To The Tribe's 
        Economic Strategy And Cultural Identity

    In addition to sharing our heritage and lands through eco-tourism, 
harnessing our natural resources into renewable energy also plays a 
significant role in supporting economic diversification for many 
tribes. Effectively utilizing wind, solar, and hydropower is both 
environmentally friendly and a source of positive economic development. 
The Yurok Tribe has recently partnered with Cal Fresh to install solar 
energy systems for enhancing food storage capacity in the upper region 
of our reservation.
    Beyond embracing renewable energy sources, tribes can also continue 
to leverage their fish and wildlife to encourage sustainability and 
self-sufficiency. For example, salmon from the Klamath River has long 
been a vital subsistence resource for the Yurok Tribe, serving as a 
primary food source and holding significant cultural importance. 
Ensuring ongoing access to salmon and preserving the Klamath River are 
essential components of our tribe's diversification efforts. We are 
proud of our Tribe's long history as experts in river restoration, and 
due to the decline in salmon populations in our waterways, we have 
trained our focus and significant resources on the Yurok Construction 
Corporation to conduct vital restoration work on the Sacramento and 
Klamath rivers and Redwood Creek. For these reasons, maintaining access 
to Klamath River salmon remains pivotal to our diversification 
endeavors.
VI. Conclusion

    Tribes need economies that can quickly adapt to ever-changing 
economic conditions, sustain and employ their communities, and help 
preserve their people's cultural identities. Reliance on one, or few, 
industries can undermine tribal economic health and unnecessarily leave 
tribes vulnerable to external market fluctuations and stressors. In 
focusing on building diverse tribal economies, we can create a 
resilient foundation that can weather the otherwise turbulent impact of 
single market failures and foster sustainable growth for the future of 
our native communities.

    Thank you. I look forward to answering your questions.

                                 ______
                                 

  Questions Submitted for the Record to Mr. Raymond Bacon, Executive 
            Director, Yurok Economic Development Corporation

            Questions Submitted by Representative Westerman

    Question 1. In your written testimony, you mentioned the various 
partnerships tribes can form with outside businesses, government 
agencies and nonprofits. Could you please elaborate on the partnerships 
that Yurok has?

    Answer. The Yurok Tribe greatly values the external partnerships it 
has developed over the years with governments and private 
organizations. Some of our most recent partnerships have included 
working with government agencies such as the Economic Development 
Administration (EDA), the Treasury Department, and the National 
Telecommunications and Information Administration. We have also 
leveraged many private partnerships, such as with CalFresh and others. 
Each partnership has benefited the tribe and tribal members in its own 
way, and we continue looking for ways to engage and further develop 
these external relationships and others.
    Last fall, the tribal Economic Development Corporation collaborated 
with the EDA to fund and create an $8 million fuel mart. The fuel mart 
is located in Orick, California, right in the heart of Yurok ancestral 
lands. We are proud of this project and its dual significance. That is, 
the fuel mart will serve as a vital revenue-generating venture for the 
tribe, and, by acquiring fee-to-trust status for the land upon which 
the development sits, we can offer fuel to our community at a lower 
cost, leveraging our exempt status and sovereignty to save our members 
money.
    The Yurok Tribe also secured State Small Business Credit Initiative 
(SSBCI) funding through the Treasury Department for our Community 
Development Financial Institution (CDFI) program. The CDFI was 
initially created to help our government address tribal entities' and 
members' historically low levels of access to financial services, and 
the SSBCI funding has been helpful as the tribe works to realize this 
goal. That said, while the program has proven successful, its impact 
was limited by our fledgling lending capacity in the finance sector 
coupled with the program's requirement for match funding.
    Despite the evident need for expanded resources, acquiring matching 
funds posed a formidable challenge due to the tribe's restricted 
discretionary budget.
    Additionally, as I mentioned in my written testimony, our tribe 
worked with the National Telecommunications and Information 
Administration through the Department of Commerce to deploy broadband 
services to thousands of homes and has partnered with CalFresh to help 
increase food storage and food security on our reservation.
    These are just some of the partnerships the tribe has been 
fortunate enough to successfully leverage in recent years to both grow 
and develop the tribe as well as improve the quality of life for tribal 
members. We are pleased with the results thus far and look forward to 
continuing to leverage public and private partnerships.

    Question 2. In your experience, what is the difficulty level for 
tribes to identify and access federal economic developmental programs, 
and how could Congress alleviate any issues?

    Answer. We are aware of, and have been pleased to participate in, 
several federally sponsored economic development programs. However, in 
my experience, tribes generally encounter a high level of difficulty 
with identifying and accessing available resources. On a scale of 1 to 
10, I would rank the difficulty of navigating these federal economic 
developmental programs as an 8.
    Several factors contribute to these hardships. First, there is a 
strong need for community development and knowledge of government 
opportunities for Indian Country. At times, we lack experience on the 
tribal side that unnecessarily prevents, or delays, access to economic 
development programs and funding.
    However, even when the tribe has the appropriate experience and 
resources for navigating application processes, requirements for 
certain programs often prove to be too cumbersome. For example, some 
programs require matching funds similar to the SSBCI example mentioned 
above. Match requirements overly burden the tribe's budget and limit 
the positive economic impact that well-intentioned programs can make. 
Most tribes are not casino tribes, and thus they lack plentiful 
discretionary funding. Accordingly, in the majority of cases, it is 
challenging for the tribe to provide the necessary match.
    Congress can help address these issues by simplifying and excluding 
harmful requirements and through offering additional training to native 
tribes to assist with navigating federal government program 
applications for accessing economic development dollars. The government 
should also think of ways to work with tribes to address accessibility 
to housing for the professionals and talent we wish to attract. While, 
at times, our tribe may receive proper training or have trainers come 
to our area to help develop our staff and community, we continue to 
lack adequate housing for those professionals which we rely on for 
identifying and navigating government opportunities.

                                 ______
                                 

    Ms. Hageman. I thank the witness for your testimony, and it 
is wonderful to hear of the successes of your Tribe.
    The Chair now recognizes Mr. Lance Morgan for 5 minutes.

  STATEMENT OF LANCE MORGAN, CEO, HO-CHUNK, INC., WINNEBAGO, 
                           WISCONSIN

    Mr. Morgan. It is a pleasure to be here. I represent the 
Winnebago Tribe of Nebraska's development corporation, Ho-
Chunk, Inc.
    We are a small to mid-sized tribe, 5,000 members, 
relatively modest reservation, not a lot of natural resources. 
We are small, but we punch above our weight. We always have, so 
if anyone's watching back home.
    The Tribe had a casino in 1992, and the state of Iowa 
authorized competition surrounding us, so we could see our 
future being built to crush us. And during that 2-month period 
of time, the Tribe organized a tribal corporation and set up an 
investment fund. And Ho-Chunk, Inc. was formed in 1994. Our 
first year, we didn't have any revenues. We were brand new. We 
had $400,000 revenues. I was the only employee, so I made 
myself CEO.
    I am a strong believer in starting at the top. And last 
year, we had revenues of $419 million, both on and off the 
reservation, and we have 1,800 employees. And this is from a 
small rural tribe.
    We do agriculture, government contracting, construction, 
and real estate development. More recently, ironically, we just 
got into gaming. We are taking over gaming off reservation in 
Nebraska, in the cities of Omaha, Lincoln and South Sioux City.
    We changed the state's constitution to make it legal for 
us. That is new, by the way.
    That is going to grow us by another couple of hundred 
million dollars and 1,500 employees. I think what is great, 
though, is the numbers are fine, but you have to think about 
what it does to the community.
    My people don't care if we are an international company, 
they only care if their lives are better. And we have grown the 
median income on our reservation from around $30,000 to $59,000 
over the last 20 years.
    And the number of people who now live below the median 
income has dropped by 6, the number of families. The number of 
families above it have grown by 188. So, we created a middle 
class out of nothing.
    Another statistic we are proud of is the number of college 
graduates has quadrupled. We also built an entire town from 
scratch called the Ho-Chunk village and we built 200 some 
housing units, which is really hard to do in a rural community 
on our reservation.
    Ironically, we did it by creating a town that was not in 
trust land status. If you look at the roles that tribes have to 
play, we have really been dealt the worst hand possible. We 
don't have control; our governments are imposed on us.
    The legal precedents really are designed to take from us 
and the trust land economic system. I wrote a paper called, The 
Curse of Trust Land, if you are curious what I think about it. 
It really limits the tribe's ability to tax and fund its own 
revenue.
    It also greatly limits individual entrepreneurs and their 
ability to access capital. So, the only entity with any money 
is the tribe itself. And the tribe itself is a social service 
delivery entity, not a development corporation.
    So, the role tribal corporations play is pretty critical in 
developing tribal economies. We have to gather capital and put 
it out there. I once joked that I can't believe we are Karl 
Marx's last hope, but the government itself has to develop 
these things.
    The primary impact, because time is short, is it gives 
tribes a flexible source of capital. Every time we get money 
from you guys, which we are thankful for and we will take it, 
but there are some sort of parameters around it, some sort of 
limitation, or it is focused on low income only.
    Where we are really trying to develop an economic middle 
class, it doesn't help us. So, we need the Federal dollars, but 
it is not very flexible. If you look at what tribes have done, 
we have gotten super sophisticated.
    We are getting smarter, in terms of how we invest the money 
and how we structure ourselves, how we use tribal advantages. 
We have really gotten sophisticated.
    We are an international company because we do SBA 8(a) 
contracting for you guys. So, we appreciate that. There are a 
lot of financial investments being made, banks, credit lines, 
credit unions, and community development institutions. Tribes 
are using corporations to move up the value chain on natural 
resource development, which is pretty critical.
    Trust land sort of forces you to just be the lessor and get 
the royalties. But if you can move up to the driller of the 
pipeline, and some tribes have used the tribal structure to do 
that, it has been very helpful in terms of developing these 
things.
    A couple of suggestions. The BIA Loan Guaranty Program has 
to stay in place. That is really the only way to access capital 
on trust land on the reservation.
    Please allow rule on the IRS failure to rule on the tax 
status of tribal corporations. I wrote a letter in 1997 on this 
issue, and they were going to do it before COVID, then they are 
going to do it after.
    Creating uncertainty in the taxation of our entities is 
really a problem. The 8(a) program is the best way for a rural 
tribe to go from zero to 60. You can speed it up. You can get 
development, you can get sophisticated quickly. That is very 
important.
    Another pet peeve of mine. Well, I think Ms. Fernandez 
solved one of my pet peeves. I hated that we couldn't really 
monetize tax credits, but I would like tribes to make an S-Corp 
election. We can't just because it is not on the list.
    If we can make an S-Corp election, then a lot of businesses 
that we bought off reservation or we bought on reservation that 
have to stay as state corporations because of regulatory 
reasons, could be solved.
    The last thing I want to mention is new market tax credits. 
Give us a direct allocation. For 3 years, the feds did not 
allocate anything. After much complaining, three tribal 
entities got one, including an entity we partly own, the Native 
American Bank.
    And if you have to understand the new market tax credits, 
it is a cash grab by these big entities, and they sell them off 
as fast as possible. And there is nobody who is lined up to do 
deals on Indian reservations because they are the hardest 
possible deals.
    So, you have to allocate money directly to entities that 
are focused on tribal, or it will never happen.
    All right. Thank you very much, I look forward to 
questions.

    [The prepared statement of Mr. Morgan as follows:]
        Prepared Statement of Lance Morgan, CEO, Ho-Chunk, Inc.

    Good morning, Chair Hageman, Ranking Member Leger Fernandez and 
Members of the Subcommittee. My name is Lance Morgan, and I am the 
Chief Executive Officer of Ho-Chunk, Inc., a tribal economic 
development corporation owned by the Winnebago Tribe of Nebraska 
(``Winnebago Tribe'' or ``Tribe''). Thank you for the opportunity to 
testify at today's hearing on ``Economic Diversification to Create 
Prosperous Tribal Economies.''
I. DEVELOPMENT OF HO-CHUNK, INC.

    Throughout the 20th century, times were hard on the Winnebago 
Reservation in northeast Nebraska. After Congress enacted the Indian 
Gaming Regulatory Act, the Tribe opened a casino on tribal land near 
the town of Sloan, Iowa in 1992. The casino was an immediate success, 
but in 1994 Iowa expanded gaming in the Tribe's primary markets. The 
Tribe then realized that gaming revenues would not be a long-term 
solution to the Tribe's overall goal of prosperity.
    The Tribe started Ho-Chunk, Inc. in 1994 to help its people by 
creating jobs and diversifying the Tribe's revenue. The name derives 
from the traditional name for the Winnebago people, ``Hochungra,'' 
which is often shortened to Ho-Chunk. The translation of Ho-Chunk, Inc. 
is ``The People, Incorporated.'' The Tribe and Ho-Chunk, Inc. set out 
with the intention of transforming our community from one of extreme 
poverty, to one with an emerging middle class with a variety of 
employment options.
    Ho-Chunk, Inc. has grown tremendously since its inception and has 
made a significant economic and social impact on the Tribe. We started 
with no revenues and one employee. Now, Ho-Chunk, Inc. has 1,800 
employees and reached a record $419 million in revenue in 2023. We 
anticipate adding another 1,500 employees and adding another $200 
million in revenue in the next 18 months.
    Ho-Chunk, Inc. has measurably improved the lives of tribal citizens 
in less than a generation. We recently completed a community-wide 
economic impact study which showed several remarkable results. In the 
last 20 years, the median household income has risen 78% to $58,240 per 
household. The number of families below the median household income has 
dropped by 6, and the number of families above the median household 
income has grown by 188 families. Additionally, the number of tribal 
members with a college degree has quadrupled.
    The Winnebago Tribe has also committed significant corporate 
resources to building an entirely new community, called Ho-Chunk 
Village. Ho-Chunk Village is an 80-acre, new urban style, walkable, 
healthy community with a wide variety of housing, cultural and 
entrepreneurial activities. The Tribe has also added over 220 housing 
units to our small rural community in the last 7 years.
II. TRIBAL ECONOMICS AND THE ROLE OF TRIBAL CORPORATIONS

    The successes of Ho-Chunk, Inc. and the Winnebago Tribe are despite 
the challenging economic development environment we must navigate. 
Government systems were often imposed on tribes, and the federal Indian 
law system is built on precedents that were designed to limit or 
outright take tribal legal and economic rights away from tribes.
    Most tribal land is held in federal trust which limits a tribe's 
ability to develop or use it to create traditional tax revenues. The 
limited ability to create a viable taxation system forces tribes to be 
dependent upon the federal government for funding basic services that 
would typically be funded by locally generated tax revenues. Federal 
trust land has also made homeownership, wealth creation, and 
entrepreneurship very difficult for individual tribal members.
    Federal funding alone is not enough to tackle the typical tribes' 
social and economic issues, so tribes are compelled to create 
additional revenue sources. The economic limitations created by legal 
restrictions and the side effects of trust land limits tribes to just a 
few economic development options--primary gaming and natural resource-
based development. The trust land system also greatly limits the 
ability of individuals to access capital.
    Given all the legal and economic restrictions in Indian Country, 
tribes are often the only entity with any ability to raise significant 
capital and are forced to try and directly develop their economies. 
However, tribes are governments, not development companies, and are far 
more comfortable delivering social services than managing complex 
corporations.
    Over the last 30 years, tribes have increasingly established quasi-
independent tribal corporate entities that allow them to bypass some of 
the limitations of being a government-owned entity to evolve into 
highly reactive and efficient tribal corporations.
III. IMPACT OF TRIBAL CORPORATIONS

    Tribal corporate entities do have some economic, tax, and legal 
advantages, but it takes time to accumulate the capital and knowledge 
to maximize those advantages. Once a tribal corporation reaches a 
certain level of success, it impacts the community in several ways: it 
will create jobs; it will generate a flexible source of income to the 
tribe that does not carry the restrictions of federal funding; and it 
will also serve as a primary driver of community and social 
development.
    The tribal corporations are increasingly using complex business 
structures to develop opportunities both on and off tribal 
reservations. This combination of developing economic and legal skill 
sets is increasingly setting tribes on the path of being able to 
dictate how to invest in their own communities and has the potential to 
create a virtuous cycle of expectation and opportunity for success for 
tribal members.

    Some examples of tribal corporate growth include the following:

  1.  Creation of complex tribal and federally chartered holding 
            company structures to consolidate corporate management 
            functions over a broad base of businesses.

  2.  Complex real estate development both on and off tribal 
            reservations.

  3.  Creating sophisticated holding companies to perform high level 
            government contracting under the SBA 8(a) program.

  4.  Expansion of gaming off reservation and state regulated gaming 
            opportunities.

  5.  Ownership of several banks, credit unions and Community 
            Development Financial Institutions.

  6.  Moving up the more profitable economic value chain of natural 
            resource development and not limiting themselves to just 
            royalties.

  7.  Increasingly sophisticated financial investments.

IV. SUGGESTIONS TO HELP TRIBAL CORPORATE GROWTH

    Tribal corporations are key sources of flexible capital, job 
creation and social and community development. Anything that helps 
tribal corporations helps tribes become more economically independent 
and self-determined. Therefore, we make the following recommendations:

  1.  Federal trust land greatly impacts the ability for tribal 
            entities to access capital, especially for reservation-
            based development. The B.I.A. Loan Guaranty Program is one 
            of the only ways that a tribe or tribal corporation can 
            access capital for difficult on reservation development and 
            it needs to be fully funded and expanded.

  2.  The IRS has not formally ruled on the taxation status of wholly-
            owned tribal corporations. This issue has been on-going for 
            over 25 years. This ambiguity has created long term 
            uncertainty and has resulted in tribes being forced to form 
            federal corporations or tribally own limited liability 
            entities instead. However, this long-term uncertainty could 
            carry over to any tribally chartered entity and is not 
            helpful for long term tribal development and planning.

  3.  Protect and promote the SBA 8(a) program. Government contracting 
            has grown remarkably over the last 20 years and is one of 
            the best ways for tribes without natural resources or 
            significant gaming revenues to expand their economies. Most 
            tribes create tribally chartered holding companies to 
            conduct their government contracting activities which makes 
            the lack of certainty for tax treatment even more of a 
            long-term problem.

  4.  Tribes are currently not allowed to make an S-Corp election in 
            the tax code. Tribal corporations will often acquire a 
            company that must maintain its current status for 
            regulatory or licensing reasons. The inability for a tribal 
            corporation to make a S-Corp election takes away one of the 
            primary tools a tribal company utilizes to impact its 
            community.

  5.  The New Markets Tax Credit Program is an excellent source for 
            tribal communities and corporate development. Indian 
            Country projects are complex and harder to do because of 
            trust land capital restrictions, so most entities who have 
            an allocation do not want to take the time to invest in 
            them. The program went three years without allocating any 
            tax credits to Indian Country. Recently three tribal 
            affiliated entities received an allocation, however, it 
            would be good if a small percentage of the allocation were 
            set aside for Indian Country.

    Thank you again for the opportunity to discuss the importance of 
diversifying tribal economies. I would be happy to answer any 
questions.

                                 ______
                                 

Questions Submitted for the Record to Lance Morgan, CEO, Ho-Chunk, Inc.

            Questions Submitted by Representative Westerman

    Question 1. Can you further expand on the impact of trust land on 
economic development plans and whether transitioning to restricted fee 
status, or another alternative would alleviate economic concerns?

    Answer. Trust land is a major impediment to Indian Country's 
economic growth as it cannot be sold, taxed, mortgaged, or used as 
collateral. Trust land status severely restricts a tribe's ability to 
use our largest asset, our land and its natural resources. Ultimately, 
it leaves tribes more dependent upon the federal government.
    If title to trust land were returned to tribes and individuals in 
fee under a new tribal status, it could help liberate Indian Country 
economically. This new tribal status must confer permanent 
jurisdiction, complete with full taxation powers, to the tribe. This 
would ensure that the land will always be subject to tribal 
jurisdiction, regardless of the race or political classification of the 
landowner.

    1a) What unintended consequences should Congress seek to avoid if 
establishing more processes for tribes to move land into restricted fee 
status?

    Answer. The federal government must uphold its general trust and 
treaty obligations to Indian Country that encompasses health, 
education, and housing. However, this obligation does not need to 
include controlling all of our land. Tribes often chose to have their 
lands held in trust because of concerns about losing jurisdiction over 
those lands. As Congress seeks to assist tribes with expanding economic 
development opportunities through increasing the flexibility of tribal 
lands, it must ensure that this is not a prelude to some kind of back-
door termination.

    Question 2. Your written testimony mentioned that it takes time for 
tribal corporate entities to gain capital and knowledge to provide an 
impact on their communities as well as others. Can you expand on the 
path Ho-Chunk Inc. has taken to develop that expertise and instances 
where Ho-Chunk Inc. may have assisted other tribal corporations in 
developing that capacity?

    Answer. Ho-Chunk, Inc. started small and with a simple mission to 
use the Tribe's various economic and legal advantages to develop and 
operate successful tribally owned businesses and to provide jobs and 
opportunities for tribal members. We have utilized a ``learn by doing'' 
approach that has resulted in creating long-serving, effective business 
managers with vast institutional knowledge. Ho-Chunk, Inc. has shared 
that knowledge and expertise with over 100 tribes who have visited our 
headquarters. We have also made investments in the future generation of 
leaders through a multitude of internship, apprentice, scholarship, 
Ambassador, and other education programs.

    Question 3. In your written testimony, you brought up the 
difficulties surrounding the taxation status for tribal corporations 
solely owned by the tribe, mainly their ambiguous nature. Could you 
elaborate further on those difficulties and how Congress could end that 
uncertainty?

    Answer. Uncertainty regarding tax treatment is a major impediment 
to tribal growth across Indian Country. We urge the IRS to clarify the 
taxation status of wholly owned tribal corporations.

    Question 4. In your written testimony, you mentioned the BIA Loan 
Guarantee Program and how it needs to be expanded. Please elaborate 
further, especially with any policy changes the program may need from a 
tribal perspective.

    Answer. Considering the difficulty obtaining a loan on trust land, 
the BIA's Loan Guarantee Program (``Program'') has proven to be a 
reliable resource for tribes. However, the Program could be made more 
efficient as it often takes a lot longer than it should to obtain a 
loan. We have found that some regions are far more efficient than 
others. Streamlining the Program and expanding the loans available 
would have far-reaching impacts for Indian Country.

    Question 5. In your experience, what is the difficulty level for 
tribes to identify and access federal economic developmental programs, 
and how could Congress alleviate any issues?

    Answer. Over the years, Ho-Chunk, Inc. has learned of and taken 
advantage of many federal economic developmental programs. However, we 
acknowledge that not all tribal nations have the capacity to identify 
and access these programs. Congress and the Administration should work 
to ensure that tribes are aware of existing economic developmental 
programs, allow for flexible capital, and give tribes the opportunity 
to manage those programs.

                                 ______
                                 

    Ms. Hageman. Again, your successes are impressive, and the 
ideas that you have provided us with today are very helpful. 
So, I thank you for your testimony.
    The Chair will now recognize Members for 5 minutes for 
questioning. And I am going to begin with myself.
    I would like to ask Mr. Ahasteen, Ms. Rupert, and Mr. 
Bacon, because I think, Mr. Morgan, you have given us some good 
ideas in terms of this next question I am going to ask.
    I am going to ask each of you to respond to this question. 
What have you found is particularly helpful for rural 
communities to expand tribal economic diversification, and what 
challenges and opportunities particularly exist in the more 
rural areas?
    Mr. Ahasteen?
    Mr. Ahasteen. I think what you really have to understand is 
that in rural areas, the cost of anything is about doubled. And 
without taking that into consideration, I will give you an 
example.
    In order for us to pave 1 mile of road, it is $3 million. 
And that is insane because we have to literally purchase 
materials that are off the Nation. We don't have access to our 
own resources because it has just become a bureaucratic 
nightmare in trying to request, even for technical assistance 
from the Department of the Interior at times to develop the 
mineral and leasing regulations that it requires.
    And as we have stated in a previous testimony, one of the 
other challenges involved is if we start going the route to 
exercise our self-determination, then we lose all access to 
some of the Federal resources, including the data sets.
    And that is really concerning to us. Because Navajo Nation, 
when we requested to start implementing some of our leasing 
regulations for minerals, we wanted to start off with one or 
two minerals.
    We don't want to adopt the entire thing, but it just seems 
that the position of the Federal Government is you have to 
adopt all of it.
    And that causes problems for us because there are different 
minerals that require us to really think about how we are going 
to develop a comprehensive, essentially an environmental policy 
within our own Nation.
    So, if we could figure out a way to reduce some of those 
bureaucratic red tapes to access some of our resources, to help 
reduce construction costs for infrastructure, that would really 
help out.
    Ms. Hageman. Wonderful, good ideas. And, Ms. Rupert, what 
are some of the challenges and what are some of the things that 
you have found particularly helpful?
    Ms. Rupert. So, challenges, this is all connected, right? 
Economic development, and we talked about roads. You have to 
have roads in order for visitors to come out and experience 
your attraction or your destination.
    So, that is always a huge barrier as well. But I look at 
cultural tourism as an opportunity for our rural communities, 
for our rural tribes.
    There is not too much infrastructure that is needed for 
cultural tourism. It is all about our people, our stories, and 
our places. And that is what I always tell tribes that are 
struggling.
    Well, who would want to come see us? And it is the 
international market that is very interested in coming and 
experiencing our culture. So, it is us, it is our people that 
people want to come and see.
    Ms. Hageman. I like that story. I don't think anyone else 
has ever said it the way that you have, and I appreciate the 
way that you have put that. And maybe there are ways that we 
can help from the tourism standpoint.
    Very quickly, Mr. Bacon, if you have some ideas on this, 
and then I am going to give a challenge to all four of you 
before we leave today.
    So, Mr. Bacon, some of the challenges and some of the 
things that have worked.
    Mr. Bacon. Thank you for that question. With Yurok Economic 
Development, particularly helpful for us is developing our own 
workforce. And that is the main focus, is developing our staff.
    As we describe it, it is grow your own because no one 
really wants to live in the rural areas or move to the rural 
areas.
    The challenge that we have in the rural area is the lack of 
adequate housing that is not HUD funded. In order to attract 
these individuals that are highly qualified, we need adequate 
housing within our area.
    Development would be a beneficial factor.
    Mr. Morgan. And, Mr. Morgan, you have also given us some 
ideas of both the challenges and the things that have actually 
worked.
    So, here is my challenge to all four of you. Have you 
identified the top five things that we could do as Congress 
within your particular areas?
    I know that every one of your reservations and the areas 
that you represent are very different from each other. But what 
I would like to do is find a way to legislatively address the 
barriers that you them.
    When we develop in Wyoming, whether it is oil and gas on 
the reservation, it is oil and gas off the reservation, on BLM 
lands, we have challenges with those barriers as well.
    What I would like to do is every one of you have brought a 
very interesting story today about what your needs are and what 
has worked for your individual members.
    What I would like you to do is bring to us the legislative 
solutions you think that we could do to help you to address the 
fact that you have an enormous reservation, the fact that you 
might have more of an urban area, the fact that you have the 
challenges with the tourism and not being able to access some 
of the resources that other people can. Help us to help you.
    Help us to come up with ideas for legislation. Because I am 
all ears if you want to come to my office and sit down and talk 
about ways that we can draft bills that will work for you, I 
want to talk about it.
    With that, I am going to call on the Ranking Member, Ms. 
Leger Fernandez, for her 5 minutes of questioning. Thank you.
    Ms. Leger Fernandez. Thank you so much for bringing the 
distinct stories, successes, and challenges on each of your 
reservations.
    Mr. Bacon, your testimony and what your Tribe is doing is 
just amazing. The range of activities that you are engaged in, 
which I think really is key. And each of you have described the 
importance of the diversification.
    One thing I want to touch on, because it is something that 
is looming is the Affordable Connectivity Program and funding 
for that which we know is essential, especially in Indian 
Country, where there is such a gap with regards to access.
    That is set to expire at the end of April. There are those, 
the entire Democratic Caucus wants to renew it. We know we have 
some Republicans who want to see it renewed.
    But tell us, what would it mean if that were to expire? 
Since you are in that business.
    Mr. Bacon. Yes. Thank you for the question, Ranking Member.
    Currently, we are still in the development phase of our 
telecommunications corporation. We are looking to provide 
access to approximately 1,000 households within our service 
area.
    One thing that we have seen and we acknowledge is the 
service area is a checkerboard of classified as low income. It 
is kind of mixed in between. I do see that there would be a 
negative effect on tribal communities if that were to expire.
    Ms. Leger Fernandez. Thank you.
    And Mr. Ahasteen, thank you as always, for coming and 
sharing the stories of your very large reservation, your very 
large and wonderful, diverse Dine experiences.
    You pointed out that, I liked this interrupted progress 
that you described. And that some of the policies and resource 
development has left a bad legacy.
    I will continue to fight for the RICO amendments. We are 
not giving that up because the uranium mining needs, we need to 
address that. You pointed out that oil and gas has been a mixed 
bag, has maybe left more bad than good.
    But we are looking forward, what do we do next? Even as we 
try to address some of what is left behind. The forward 
looking. I really appreciated that you gave us very specific 
examples of a solution right in each of yours of what do we do 
with DOE.
    You had that in your written testimony. But can you sort of 
share with us a little bit of what you would like us to focus 
on? You had, I think, maybe five different proposals, but what 
do you want us to hear this morning?
    Mr. Ahasteen. Thank you, Ranking Member Leger Fernandez.
    Really, what we want to address are the jurisdictional 
barriers that limit our progress in being able to exercise our 
full self-determination. And that is, again, focusing on giving 
tribes the exclusive jurisdiction to manage their affairs.
    It seems a little redundant that we have to obtain three 
different environmental clearances for the same project and 
that the Federal agencies are not talking or working with one 
another.
    And one of those specific examples is with a lot of our 
road projects with the Navajo Department of Transportation. The 
Federal Highways Administration will go through their clearance 
processes, but then the BIA will require processes on their own 
and will not accept Federal Highways as environmental clearance 
documents.
    So, that is just a barrier. And on top of that, we have 
tribal law. The Navajo Nation does its own environmental 
clearance review as well.
    So, having to go through three different environmental 
clearance processes, three different right-of-ways, is 
sometimes challenging, depending on a lot of the jurisdictional 
barriers.
    Ms. Leger Fernandez. Right. And some of the potential 
solutions that each of you actually set and gave us in your 
written testimony, I think, are things that we can work on from 
the why don't they include the entire Navajo Nation in the MLS, 
right?
    There are certain ways in which we can address issues. You 
also point out the importance of credit. And Mr. Morgan, I did 
about a billion dollars' worth of financing, which doesn't 
sound like a lot, but New Mexico is very small, and access to 
credit is so essential.
    And you pointed that out as well. If we don't get credit 
into Indian Country, you can't build the businesses. And the 
concept of the new markets tax credit set aside, I think, is 
something we have all thought a lot about and would like to 
push.
    And the fact that we don't have the IRS actually telling us 
what to do with tribal corporations when we have been begging 
them for it, and they have been promising that to us.
    So, there are both legislative changes that we will 
definitely take on. These are things we are very interested in 
doing, but also pushing for those clarifications that we should 
be getting out of Treasury that they have promised us for 
decades.
    We will join in on pushing them at that, and we will follow 
up with you because we ran out of time. And thank you so very 
much, and I yield back.
    Ms. Hageman. Thank you. The Chair now recognizes Mr. Carl 
for 5 minutes of questioning.
    Mr. Carl. Thank you, Madam Chair, and thank you to all the 
folks that took time from their lives to come in to speak 
today. Your words are not falling on deaf ears.
    Mr. Ahasteen, I said it better, didn't I? Tell Madam 
Chairwoman that I said it better.
    Mr. Ahasteen. All I say is that you just fake laugh and add 
Steen at the end.
    Mr. Carl. OK. I have been a county commissioner for 8 years 
prior to this job. I have built many a mile of road, and I am 
telling you, $3 million for a mile of road is outrageous.
    And if nothing else comes out of this meeting, I understand 
your frustrations with that. So, I am open to help you in any 
way I can.
    With that said, thank you for joining us today. It is 
really great to have someone who understands, I am still 
talking to you, sir, understands the challenges facing the 
tribal communities firsthand.
    As I often say, only those who live it truly understand it. 
And I think everyone in this room understands what I am saying 
there. For decades, the Federal Government has been working 
towards self-determination of the tribes, allowing them to 
manage their own services and economic plans.
    Tribes have been trying different ways to diversify their 
economy to benefit their members, create a substantial system, 
but you know that there is a lot of red tape and unclear rules 
that make it tough for them to start businesses and to grow.
    Mr. Ahasteen, how can Congress do more to support tribes in 
making their own development, especially when it comes to 
broadening their economics and dealing with all the 
regulations? What can we do to help that?
    Mr. Ahasteen. One of the priorities of President Nygren has 
been to really identify and address what specific 
jurisdictional barriers are preventing us.
    I think one of the main issues is, again, the exclusive 
authority to actually conduct our businesses free of 
restrictions by the Federal Government and at times state 
governments, depending on, again, which project that you are 
working on.
    But even a lot of the funding that has come out that is 
supposed to benefit tribes, we find it based off of policies 
that haven't been updated in 20 plus years that really restrict 
the tribes' abilities to access those dollars.
    And one of the examples is the tax credits that were made 
available under the Inflation Reduction Act and the Navajo 
Nation not being able to utilize that because of a non-
metropolitan statistical area or a metropolitan statistical 
area definition that actually includes counties with tribal 
data.
    And some of the border towns are doing well. Flagstaff, 
Coconino County has probably the highest income for the Arizona 
region, but yet that is grouped in with some of the reservation 
territories like Loop, who is significantly economically 
disadvantaged.
    So, being disqualified from the tax credits that were meant 
to actually benefit tribal communities is something that I 
think is an unintended consequence.
    I think really just taking a look back at all of the 
regulations and having appropriate consultation with the 
Federal agencies to updating a lot of those statistical area 
mappings, I think would very well benefit tribes in helping us 
move forward in securing our future, especially in the energy 
sector.
    Mr. Carl. Thank you.
    Mr. Bacon, real quick. Yesterday, I had one of the tribes 
come in my office and talk to me about the small business loans 
and the fear of where this is going on the small business side.
    They basically were rating a particular tribe as no longer 
as a small business. Can you give me some idea what the impact 
is going to be from that?
    Mr. Bacon. Congressman, you are referring to the SSBCI?
    Mr. Carl. Yes.
    Mr. Bacon. Absolutely. We were one of the tribes that 
received the SSBCI. Actually, we were one of the first to 
receive that funding source.
    One of the challenges in receiving that funding source was 
there was a requirement of match funds, and most tribes are new 
to the lending capacity side of things. So, you are subject to 
what your lending capacity is from previous. With the Yurok 
Tribe, our lending capacity was at $1.2 million, which is not 
much.
    But part of that is we had to have discretionary funds to 
match that $1.2 million. So, really, we didn't build a big 
giant fund, but we are trying to leverage that to be successful 
in funding other tribal initiatives.
    There is a bit of a challenge with it. If the matching 
funds didn't exist, it would be quite successful.
    Mr. Carl. Would you reach out to my office and see what we 
can do to work together and see if we can get that addressed?
    Mr. Bacon. Absolutely.
    Mr. Carl. Thank you.
    Madam Chair, thank you.
    Ms. Hageman. Thank you, Mr. Carl.
    And the Chair will now recognize Mr. Huffman for 5 minutes 
of questioning.
    Mr. Huffman. Thank you, Madam Chair.
    I am really impressed with this panel of witnesses. I 
appreciate the testimony and the ideas from all of you.
    I want to go back to Mr. Bacon from my district, of course, 
because I have a special interest in tribal economic 
development that also embraces sustainability that is good for 
the environment and our natural resources.
    And the Yurok Tribe has been a real leader in this space, 
of course. We want to see, as we move forward with things like 
offshore wind and renewable energy transition, not just 
consultation with tribes, but a seat at the table for tribes.
    And you have become leaders in broadband, construction, and 
so many other things. I would love to see tribal expertise and 
inclusion in this energy transition as we go forward.
    And I am definitely committed to working with the Yurok 
Tribe to make sure that that happens. But I want to bring it 
back to climate change and its impact on fisheries. Something 
that is not only culturally significant for the Yurok and other 
tribes, but very economically significant.
    And I want to just ask you if you could speak to how 
funding from programs like the Scenic Byways Program has 
actually helped facilitate some of your work at this 
intersection of economic development and natural resource 
protection?
    Mr. Bacon. Thank you for that question, Congressman.
    The Scenic Byways Program has been a real benefit to the 
Yurok Tribe. We are fortunate enough to have a strong 
relationship with Federal and state agencies.
    We are able to acquire the funds through the Scenic Byways 
Program, which we used to develop a visitor center.
    The center provides an opportunity to tell our story for 
the Yurok people and our members to express their artistic 
talents and sell goods within that visitor center.
    This also is a platform for ecotourism. We are fortunate 
enough to be able to run a business of redwood Yurok canoe 
tours. And this is a scenic ecotourist business that takes you 
on a journey down the Klamath River and connects you with what 
really the Yurok people are about, which is the Klamath River.
    So, we like that relationship with the Federal and state 
agencies, and we continue to maintain that relationship.
    Mr. Huffman. And I have seen some of the great work that 
the Yurok Construction Company is doing. And I have also seen 
young people who have come up through your workforce 
development efforts and are operating heavy equipment, 
restoring Redwood Creek and other areas in ways that will 
enhance that fishery. Build on the ecotourism.
    Could you speak a little bit about how that construction 
enterprise is contributing to your economic development and 
also the issue of food sovereignty?
    I know that we haven't talked a lot about that yet, but you 
have a unique partnership with CalFresh that is doing some 
interesting and innovative things that are helping address food 
sovereignty.
    Mr. Bacon. Absolutely. We know the Klamath salmon is a 
vital source of subsistence for the Yurok Tribe. As we say, the 
Yurok Tribe doesn't exist without salmon. It is who we are as a 
people.
    With the decline of the salmon population, we have made a 
strong pivot towards the restoration efforts in the 
preservation of salmon. It has always been a priority of our 
Tribe.
    The restoration effort is spearheaded by the Yurok 
Construction Corporation and our fisheries division for the 
Tribe.
    Currently, they are working on replanting and reseeding as 
the waters come down from the dams and the reservoirs are 
exposed.
    So, there is a massive effort going on right now to plant 
traditional plants, native plants within that area, trees, oak 
trees, the shrubbery that takes place and holds the banks 
stable for the river to ebb and flow.
    The benefits of this is we hope to see that the salmon 
return immediately, and the long-term benefit is our effort to 
restore an entire ecosystem to thrive as it once did in the 
beginning.
    You had mentioned the relationship with CalFresh. Since 
COVID had come into play here, we recognized that there was a 
shortage of food storage in the upper part of our reservation.
    So, we were fortunate enough to partner with CalFresh to 
install a small solar grid that supported refrigeration. In 
that effort, the refrigeration units allowed us to partner with 
our Food Sovereignty Program.
    Our Food Sovereignty Program grows fresh vegetables that 
are seasonal. In return, that allows us to distribute those 
healthy foods back to our tribal membership. So, we were really 
appreciative to have that relationship.
    Mr. Huffman. Thank you, Madam Chair. I yield back.
    Ms. Hageman. Thank you.
    I want to thank the witnesses for your valuable testimony 
and the Members for your questioning. I also want to reiterate 
what I said, which is that I really encourage you to contact 
us, contact the staff, contact my office, and talk to us, help 
us to draft the types of legislation that you are talking 
about.
    I think if there has been one primary issue that I have 
focused on as Chairman of this Subcommittee, it is autonomy and 
sovereignty.
    I think it is absolutely critical that our tribes take 
responsibility for their circumstances, and that we also make 
sure that they have the freedom, the ability, and the resources 
to do what you need to do in terms of taking care of your 
members.
    I truly believe that that is where the success for our 
tribes and our tribal members are going to come from, it is 
going to come from you, not the Department of the Interior or 
the bureaucracy back here.
    I love the idea of giving you more autonomy to make the 
decisions that you need to make for your members so that you 
can succeed.
    The members of the Committee may have some additional 
questions for the witnesses and we will ask you to respond to 
these in writing if they are submitted.
    Under Committee Rule 3, members of the Committee must 
submit such questions to the Committee Clerk by 5 p.m., on 
Wednesday, February 21, 2024, and the hearing record will be 
held open for 10 business days for these responses.
    If there is no further business, without objection, the 
Committee stands adjourned. Thank you.

    [Whereupon, at 11:15 a.m., the Subcommittee was adjourned.]

            [ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]

Submission for the Record by Rep. Grijalva

                        Statement for the Record
      United South and Eastern Tribes Sovereignty Protection Fund

    The United South and Eastern Tribes Sovereignty Protection Fund 
(USET SPF) is pleased to provide the House Subcommittee on Indian and 
Insular Affairs (SIIA, or Subcommittee) with the following testimony 
for the record of the February 15, 2024 oversight hearing, ``Economic 
Diversification to Create Prosperous Tribal Economies.'' This hearing 
focused on the diversification of Tribal economies to expand services 
to Tribal citizens and build sustainable economic systems to benefit 
current and future generations. It also focused on how Tribal Nations 
have sought to develop our natural resources, unique Tribal-centric 
tourism opportunities, and establish Tribally chartered corporations to 
increase economic opportunities. USET SPF supports the efforts of 
Tribal Nations to exercise our sovereignty and self-determination to 
create viable and sustainable economic opportunities and job creation 
for our communities. However, many federal programs' management and 
funding systems operate under an archaic model of paternalism that does 
not support Tribal Nation sovereignty and self-determination.
    In addition to the focus of SIIA's February 15, 2024 hearing, USET 
SPF offers several additional priorities that must also receive the 
same consideration from Congress and the Subcommittee to empower Tribal 
Nations to pursue efforts in Nation rebuilding. These include the 
removal of bureaucratic and legal barriers to Tribal Nations pursuing 
economic development, tax parity, support for the restoration of Tribal 
homelands, and the expansion of self-governance contracting and 
compacting across the federal government. These areas must be addressed 
to ensure that we have economic parity and equitable opportunities to 
pursue initiatives that support our economic growth and create jobs for 
our Tribal citizens. We also anticipate, and support, forthcoming 
guidance from the U.S. Department of the Treasury to clarify the tax 
status of Tribally chartered corporations (TCCs), which has been an 
issue that has long stifled the economic progress of our Tribal Nations 
and our further pursuits and priorities of Nation rebuilding. In 
addition to Treasury's clarification of the tax status of TCCs we 
strongly recommend that Congress and SIIA explore other legal 
clarifications of the Internal Revenue Service's (IRS) tax code to 
ensure legal permanency of the tax status of our TCCs. This issue is 
critically important and timely so that Tribal Nations can fully take 
advantage of the numerous tax credits authorized under the Inflation 
Reduction Act.
    USET Sovereignty Protection Fund (USET SPF) is a non-profit, inter-
tribal organization advocating on behalf of thirty-three (33) federally 
recognized Tribal Nations from the Northeastern Woodlands to the 
Everglades and across the Gulf of Mexico.\1\ USET SPF is dedicated to 
promoting, protecting, and advancing the inherent sovereign rights and 
authorities of Tribal Nations and in assisting its membership in 
dealing effectively with public policy issues.
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    \1\ USET SPF member Tribal Nations include: Alabama-Coushatta Tribe 
of Texas (TX), Catawba Indian Nation (SC), Cayuga Nation (NY), 
Chickahominy Indian Tribe (VA), Chickahominy Indian Tribe-Eastern 
Division (VA), 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), ), Mi'kmaq Nation (ME), Mississippi 
Band of Choctaw Indians (MS), Mohegan Tribe of Indians of Connecticut 
(CT), Monacan Indian Nation (VA), Nansemond Indian Nation (VA), 
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), Rappahannock Tribe (VA), 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), Upper Mattaponi Indian Tribe (VA) and the Wampanoag 
Tribe of Gay Head (Aquinnah) (MA).
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Economic Development in Indian Country and the USET SPF Region

    Prior to European contact, Tribal Nations, including USET SPF 
members, had a long history of dynamic economies and governance 
structures. Robust trade networks connected Tribal Nations and the 
goods we produced. As with other aspects of Tribal governance and 
infrastructure, the removal, termination, and assimilation policies of 
the United States government negatively impacted our traditional 
economic trade. Over the course of centuries, Tribal Nations ceded 
millions of acres of land and extensive resources to the U.S.--
oftentimes by force--in exchange for which it is legally and morally 
obligated to provide benefits and services in perpetuity. Because of 
this historic and ongoing diplomatic relationship, the federal 
government has trust and treaty obligations to support Tribal self-
governance and self-determination, along with rebuilding Tribal Nations 
and economies. Unfortunately, at no point has the federal government 
fully delivered upon and upheld these obligations.
    In addition to being relegated to fractions of our original 
homelands, which can be in remote areas, Tribal Nations lack 
governmental parity in economic development opportunities and treatment 
under the U.S. tax code. All Tribal Nations, especially USET SPF member 
Tribal Nations, vary in levels of economic activity, capacity, and 
development. Some Tribal Nations have decades of experience and 
familiarity with economic development initiatives, while some are just 
starting to pursue these initiatives. This diversity demands that 
federal policy not adopt a one-size-fits all approach in supporting 
Tribal Nations and businesses to pursue economic development 
initiatives to support our communities and engage in Nation rebuilding. 
With nearly every aspect of economic development regulated by the 
federal government, economic progress in Indian Country is often 
stymied by burdens on Tribal Nations and businesses. These burdens have 
contributed to a perpetual cycle of social and economic hardship in our 
communities and are a remnant of paternalism that continues to exist 
today, despite an evolution away from past policies of termination and 
assimilation toward greater Tribal self-determination and self-
governance.

    In 2012, the Federal Reserve Board of Governors issued a report on, 
Growing Economies in Indian Country, that outlined eight issues as 
fundamental challenges to realizing economic growth in Indian Country. 
USET SPF's member Tribal Nations, with few exceptions, still 
disproportionately contend with these same challenges, such as:

  1. Insufficient access to capital;

  2. Capacity and capital constraints of small business;

  3.  Insufficient workforce development, financial management 
            training, and business education;

  4. Tribal governance constraints;

  5.  Regulatory constraints on land held in trust and land designated 
            as restricted use;

  6. Underdeveloped physical infrastructure;

  7. Insufficient research and data; and

  8. Lack of regional collaboration.

    Though this report is over a decade old, its relevancy today on the 
current state of economic challenges in Indian Country highlights the 
failures of the federal government in upholding its trust and treaty 
obligations to Tribal Nations. Congress and the Administration must 
work to free Tribal Nations from over-burdensome laws and regulations 
that impede our social and economic success. This is especially 
important in an environment of the federal government's failures to 
uphold trust and treaty obligations to fully fund programs and services 
for Indian Country. Similar to other governments, Tribal Nations 
provide vital economic, social, health, and public safety services to 
our people. As it is for any other sovereign, economic sovereignty is 
essential to our ability to be self-determining and self-sufficient. 
While our economic success in no way diminishes or eliminates the 
United States' moral and legal trust and treaty obligations to Tribal 
Nations, it remains critical to our continued Nation rebuilding. 
Building strong, vibrant, and mature economies is more than just 
business development. It requires comprehensive planning to ensure that 
our economies have the necessary infrastructure, services, and 
opportunities for our citizens to thrive. And when Tribal Nations and 
our citizens have economic success, surrounding communities and their 
citizens share in the benefits. This results in stronger Tribal Nations 
and a stronger America.
Ensure Tribal Nation Economic Parity

    The federal government has a responsibility to ensure that federal 
tax law treats Tribal Nations in a manner consistent with our sovereign 
governmental status, as reflected under the U.S. Constitution and 
numerous federal laws, treaties, and federal court decisions. With this 
in mind, we remain focused on the advancement of tax reform that would 
address inequities in the tax code and eliminate state dual taxation. 
Revenue generated within Indian Country continues to be taken outside 
our borders or otherwise falls victim to a lack of parity. Similarly, 
Tribal governments continue to lack many of the same benefits and 
flexibility offered to other units of government under the tax code. 
This largely prevents Tribal Nations from achieving an economic 
multiplier effect, allowing for each dollar to turn over multiple times 
within a given Tribal economy. The failure of the federal government to 
recognize Tribal Nations in a manner consistent with our sovereign 
governmental status has hindered our efforts to rebuild and grow our 
economies.
    USET SPF continues to press Congress for changes to the U.S. tax 
code that would provide governmental parity and economic development to 
Tribal Nations. These efforts included support in previous Congresses 
for the Tribal Tax and Investment Reform Act. This bill specified the 
treatment of Tribal Nations as states with respect to bond issuance and 
modified the treatment of pension and employee benefit plans maintained 
by a Tribal Government. It also aimed to modify the treatment of Tribal 
foundations and charities, improve the effectiveness of Tribal child 
support enforcement agencies, and recognize Tribal governments for 
purposes of determining whether a child has special needs eligible for 
the adoption tax credit. USET SPF continues to urge the Subcommittee to 
support similar legislative efforts in the 118th Congress to increase 
Tribal Nation economic parity.
Address Dual Taxation in Indian Country

    Dual taxation hinders Tribal Nations from achieving our own revenue 
generating potential. Although Tribal Nations have authority to tax 
non-citizens doing business in Indian Country, when other jurisdictions 
can tax those same non-citizens 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 
unfeasible. Dual taxation undercuts the ability of Tribal Nations to 
offer tax incentives to encourage non-Indian business entities onto our 
lands to create jobs and stimulate Tribal economies. As long as outside 
governments tax non-Indian businesses on our lands--even if a Tribal 
government offers complete Tribal tax immunity to attract a new non-
Indian business--that business is subject to the same state tax rate 
that is applicable outside our jurisdictional boundaries. As a matter 
of economic fairness, we ask SIIA to work with us to support and 
advance initiatives that would bring certainty in tax jurisdiction to 
Tribal Lands by confirming the exclusive, sovereign authority of Tribal 
governments to assess taxes on all economic activities occurring within 
our jurisdictional boundaries.
Support Responsible Development in the Energy Sector

    USET SPF member Tribal Nations, and our respective Tribal Lands and 
energy resources, are located within a large region that presents 
diverse geographical environments and opportunities for both 
conventional and renewable energy development. Our member Tribal 
Nations could benefit from the unlocked potential of those energy 
resources and realize energy development goals, through appropriate 
Congressional action and investment in Indian Country; and further 
actions by the Administration, particularly to promote balanced 
geographical representation and inclusion of USET SPF member Tribal 
Nations in energy programs.

    USET SPF has established its energy priorities, as follows:

     Tribal self-determination and control of natural resources 
            and energy assets, to make conservation and development 
            decisions to preserve Tribal sovereignty, protect Tribal 
            assets, and to achieve economic independence, creation of 
            jobs, and improvement of Tribal citizens' standard of 
            living.

     Tribal capacity building effort involving multiple federal 
            agencies, universities, and the private sector.

     Reform core federal programs, expertise, and funding to 
            support Tribal energy resource development and market 
            access.

     Remove barriers to the deployment of Tribal energy 
            resources, such as bureaucratic processes, insufficient 
            access to financial incentives, and interconnection and 
            transmission on power grid.

    We remain concerned, however, with ongoing efforts to streamline 
energy development by bypassing requirements under the National 
Environmental Policy Act (NEPA). We do not oppose conventional or 
renewable energy development, and many of USET SPF's member Tribal 
Nations pursue these activities. However, such development occurring 
outside of Tribal Nation jurisdictional boundaries must not come at the 
expense of our cultural resources and natural environments or Tribal 
consultation. Tribal Nations have already experienced immense land 
loss, theft, and the destruction and desecration of our cultural and 
environmental resources and aboriginal homelands. We should not be 
subjected to such actions again in order to further a domestic energy 
policy agenda.
    In addition to our concerns with scaling back NEPA provisions, 
several USET SPF member Tribal Nations have had to contend with federal 
agencies failing to properly consult with Tribal Nations on proposed 
energy projects. This includes wind energy development projects under 
the oversight of the Bureau of Ocean Management that have been proposed 
for construction, and some of which are currently undergoing 
construction, on the Outer Continental Shelf. Several of our member 
Tribal Nations were not properly consulted about the permitting of 
these wind energy project sites and have not received the resources and 
technical assistance required to properly and adequately review 
environmental, geological, and other assessments related to these 
projects. Furthermore, funding remains stagnate and inadequate for 
Tribal Historic Preservation Officers (THPOs) to conduct reviews of 
proposed projects in order to appropriately ascertain the potential 
cultural and environmental impacts. We continue to urge the 
Subcommittee to support increased funding for THPOs and ensure that 
efforts to streamline environmental review process are not implemented 
at the expense of the destruction of our cultural resources, sites, and 
natural environments.
Clarify the Tax Status of TCCs and Recognize that the Tax Exempt Status 
        of Sec. 17 Corporations Cannot be the Sole Alternative or 
        Solution for Tribal Nations

    As mentioned by the witnesses testifying before SIIA during the 
February 15, 2024 hearing, the uncertainty regarding the tax status of 
TCCs is a major federal policy barrier faced by Tribal Nations as we 
seek to rebuild our economies and generate our own governmental 
revenues. As we stated in our 2022 USET SPF publication, ``Marshall 
Plan for Tribal Nations: A Restorative Justice and Domestic Investment 
Plan'':

        ``Historic and modern federal policies have created barriers 
        and inequities for Tribal Nations' attempts to rebuild and grow 
        our own economies, as well as generate our own government 
        revenues. Today's federal economic policies continue to fail to 
        support Tribal Nations' modern efforts to revitalize our 
        economies. The hampering of Tribal Nations' abilities to 
        generate Tribal government revenues has compounded the harms 
        done by the United States' failure to fully fund its trust and 
        treaty obligations . . .'' \2\
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    \2\ United South and Eastern Tribes Sovereignty Protection Fund, 
Marshall Plan for Tribal Nations: A Restorative Justice and Domestic 
Investment Plan, 2022. https://www.usetinc.org/wp-content/uploads/2022/
11/USET-SPF-Marshall-Plan-for-Tribal-Nations.pdf.

    Most Tribal Nations in the United States continue to endure a long 
history of asset deprivation, colonization, forced removal, war, loss 
of our homelands, and restricted access to traditional lands and 
resources, which has pushed Tribal Nations ``into a near-assetless 
state for at least a century.'' \3\ The many consequences of this 
sustained economic deprivation persist to this day. They manifest 
themselves in the form of obstacles to economic development that 
include, but are not limited to, insufficient access to capital; lack 
of small business capacity; insufficient workforce development, 
financial management training, and business education; regulatory 
constraints on land held in trust and land designated as restricted use 
(prohibiting such land from being used as collateral or as property 
subject to Tribal taxes); and underdeveloped physical 
infrastructure.\4\ Some Tribal Nations have succeeded in producing 
economic growth and improved per capita incomes in the past few decades 
by employing self-determined economic development approaches. Even so, 
estimates indicate that at current rates of growth the per capita 
income of Tribal citizens will not achieve parity with the rest of the 
United States for at least four more decades.
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    \3\ Id., quoting Native Nations Inst., Access to Capital and Credit 
in Native Communities 5 (2016), https://nni.arizona.edu/application/
files/8914/6386/8578/Accessing_Capital_and_Credit_ 
in_Native_Communities.pdf.
    \4\ BD. of Governors., Fed. Rsrv., Growing Economies in Indian 
Country: Taking Stock of Progress and Partnerships 3 (2012), https://
www.federalreserve.gov/newsevents/conferences/GEIC-white-paper-
20120501.pdf.
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    The result of depressed economies has a circular effect. Without 
the ability to stimulate economic growth, diversify economic 
activities, and generate revenues to fund governmental programs and 
services, Tribal Nations lack the resources to invest in building the 
essential physical and human infrastructure necessary to attract the 
capital investment needed for Tribal economies to compete in the 
regional, national, and global marketplace. By clarifying the tax 
status of TCCs, the federal government would take a critical step in 
reversing some of the harms caused by its failure to adopt economic 
growth policies that enable Tribal Nations to create conditions to 
build our economies on a broader scale. Clarification of the tax status 
of TCCs is also critically important and timely so that we can fully 
take advantage of the recent tax credits authorized by the Inflation 
Reduction Act.
    Tribal governments are different than other governments in the 
federal system in that we do not have a significant tax base. Given the 
United States' failure to fully fund its trust and treaty obligations, 
and reflecting Tribal Nations' commitment to self-determination, it is 
essential that Tribal governments generate revenues for programs and 
services by establishing corporations, limited liability companies, and 
other business structures to engage in economic development. Although 
these Tribally owned entities function like commercial enterprises in 
the marketplace, their purpose is to generate revenues to enable 
program and service delivery to Tribal citizens.
    Tribal Nations require new and authoritative tax guidance that 
supports and promotes our sovereign authority, assists us in providing 
for our Tribal citizens, and helps us restore our economies. Tribal 
Nations should no longer be treated differently than state and local 
governments that regularly engage in business activities to fund their 
citizen programs and services (such as golf facilities, convention 
facilities, tourism, etc.), which the IRS deems exempt. Indeed, the 
unique government-to-government and trust relationship that Tribal 
Nations have with the federal government demands that the solution not 
limit, in any way, but rather expand the tax exemption for Tribal 
economic activity.
    IRS guidance, to date, as it relates to Tribal government 
businesses has recognized exempt status only in limited and confining 
circumstances. In Revenue Ruling 81-295, the IRS ruled that Section 17 
corporations shared the immunity from federal income tax enjoyed by 
Indian tribes themselves. That ruling was reiterated in Revenue Ruling 
94-16, though in the ruling, the IRS also determined that a Tribally 
owned corporation chartered under state law was not exempt from federal 
corporate income tax. For Section 17 corporations, both rulings 
essentially applied the reasoning set out in the 1996 Treasury 
Regulation Sec. 301.7701-1(a)(3), which provides that ``[a]n entity 
formed under local law is not always recognized as a separate entity 
for federal tax purposes . . . tribes incorporated under Section 17 of 
the Indian Reorganization Act . . . are not recognized as separate 
entities for federal tax purposes.'' This reasoning is sound, and it 
should apply to TCCs that serve Tribal purposes; TCCs should not be 
treated as separate entities from the Tribal government for tax 
purposes.
    The IRS appeared to recognize this logic when, after the 1994 
revenue ruling, it issued several private letter rulings concerning 
Tribally owned and chartered corporations, concluding, in each case, 
based on several factors, that they were ``integral parts'' of the 
Tribal governments that created them, notwithstanding their separate 
corporate status, and were thus entitled to share in each Tribal 
government's tax immunity. For example, in IRS. Priv. Ltr. Rul. 
200148020 (November 30, 2001), the IRS concluded that a Tribally 
chartered college was an integral part of the Indian tribe that created 
it. The ruling looked to ``the Indian tribe's . . . degree of control 
over the enterprise and the Indian tribe's . . . financial commitment 
to the enterprise.'' It identified eight factors that it viewed as 
pertinent to its determination: (1) the Indian tribe's power to appoint 
and remove directors; (2) Tribal representation on the board; (3) 
Tribal action to establish the entity to conduct business on Tribal 
land, and Tribal control over its activities; (4) Tribal power to 
terminate the entity; (5) the Indian tribe having the sole proprietary 
interest in the entity; (6) the entity's obligation to remit profits to 
the Indian tribe; (7) the entity's obligation to submit financial 
reports to the Indian tribe; and (8) Tribal control over audits of the 
entity.\5\
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    \5\ See also I.R.S. Priv. Ltr. Rul. 200112013 (March 23, 2001); 
I.R.S. Priv. Ltr. Rul. 200409033 (February 27, 2004); I.R.S. Priv. Ltr. 
Rul. 199909013 (March 5, 1999) (in which the IRS upheld the ``integral 
part'' status of an enterprise created by a Tribal government for the 
purpose of managing Tribal property and acting as the Tribal 
government's business arm, on the grounds of the Tribal government's 
power to remove directors and terminate the existence of the 
enterprise, the Tribal government's substantial financial stake in the 
enterprise, and the substantial rights to its profits, and the absence 
of any private ownership of the enterprise).
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    The IRS, however, declared a moratorium on private letter rulings 
raising the ``integral part'' test in 2007. This moratorium has 
prevented Tribal governments from ensuring that a TCC is not considered 
a separate taxable entity. That said, USET SPF does not advocate for 
the resurrection of the integral part test for evaluating the tax 
status of TCCs. The integral part test is cumbersome and results in 
disparate and uneven results, and it does not go far enough to provide 
the certainty that Tribal governments require to secure revenue for the 
benefit of our citizenry. Tribal Nations require a categorical rule as 
to the tax status of TCCs, and not a case-by-case determination. 
Without a categorical rule, there will be continuing uncertainty over 
the tax status of TCCs, which negatively impacts the ability of Tribal 
Nations to plan for and realize economic development opportunities.
    In addition, the tax-exempt status of Section 17 corporations does 
not provide Tribal governments with a productive vehicle for economic 
development. Although Revenue Rulings 81-295 and 94-16 and Treasury 
Regulations Sec. 301.7701-1(a)(1)(3) provide clarity on the tax 
consequences for Section 17 corporations, these federally chartered 
entities lack the flexibility and agility needed when Tribal Nations 
seek to seize economic opportunities. The process of adopting and 
amending the charters of federally chartered Section 17 corporations is 
cumbersome, time consuming and often precludes Tribal Nations from 
nimbly capturing economic opportunities. Further, the structural 
limitations of Section 17 corporations are a barrier to economic 
development in many instances. For example, under the terms of 25 
U.S.C. Sec. 5124, a Section 17 corporation may not lease Tribal Land 
(to a third party) for a period longer than 25 years. That limitation 
frequently prevents Section 17 corporations from being able to 
profitably develop Tribal Lands for commercial purposes, as sublessees 
often insist on much longer lease terms to justify substantial 
investments in improvements.
    We submit there is sound and sufficient legal authority and 
reasoning to align the tax treatment of TCCs with that of Section 17 
corporations. The legal and policy underpinnings for exempting economic 
development corporations from tax under 26 U.S.C. Sec. 501(c)(3) may 
also provide a rationale for exempting TCCs from tax. Further, there is 
constitutional and treaty support for exempting Tribal government 
economic development activity from taxation. More to the point, the 
sovereign authority of Tribal Nations to engage in whatever business 
necessary to provide for our citizens should not be undermined by 
either the lack of Treasury guidance or issuance of restrictive 
guidance. Further, outside of the context of Tribally chartered 
entities, the IRS has long recognized that sole proprietorships, 
partnerships, S-corporations, and limited liability companies are not 
to be taxed at the business entity level. Instead, these businesses 
possess ``pass through'' tax treatment and are taxed at the ownership 
level. The same principle should apply to Tribally chartered entities 
and Congress and SIIA should direct the IRS to adopt and implement this 
principle.
    Tribal governments have become increasingly sophisticated in the 
structuring of business operations and transactions. Some Tribal 
governments have created not just corporations and limited liability 
companies, but general codes allowing the general public to obtain such 
a corporate entity for purchase.\6\ Other Tribal governments have 
utilized Section 17 corporations in conjunction with TCCs, with Tribal 
entities as subsidiaries, and others have utilized Tribally chartered 
entities as pooled investment instruments with non-Indians to share 
equity participation and corresponding economic benefit. Policy must 
favor maximum flexibility and support for Tribal Nations through the 
utilization of Tribally chartered entities.
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    \6\ See e.g., MILLE LACS BAND STATUTES ANNOTATED, Title 16 
Corporations, Sec. 1102 (``One or more natural persons of full age may 
act as incorporators of a corporation by filing with the Commissioner 
articles of incorporation for the corporation.'').
---------------------------------------------------------------------------
    We strongly urge that Congress and SIIA direct Treasury and IRS to 
uphold its trust and treaty obligations and align the tax treatment of 
our TCCs in a manner that empowers and supports the advancement of our 
economic development priorities. Tribal Nations have established TCCs 
for the sole purpose of rebuilding our Tribal economies and advancing 
our economic priorities for Nation rebuilding to support the economic 
and social well-being of our citizens and communities. Although USET 
SPF anticipates the issuance of forthcoming guidance from Treasury on 
the tax status of TCCs, we encourage Congress and SIIA to explore 
additional legal opportunities to establish permanence in clarifying 
the tax status of TCCs.
Support the Restoration of Tribal Homelands and Enact a `Carcieri Fix'

    Possession of a land base is a core aspect of sovereignty, cultural 
identity, and represents the foundation of a government's economy. This 
is no different for Tribal Nations. 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. 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 must ensure that every Tribal Nation has the ability 
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 its trust and treaty 
obligations to Tribal Nations and regaining a land base is essential to 
the exercise of Tribal self-governance. Jurisdiction over territory is 
a bedrock principle of sovereignty, and Tribal Nations must exercise 
such jurisdiction in order to fully implement the inherent sovereignty 
we possess. While USET SPF member Tribal Nations ultimately seek full 
jurisdiction and management over our homelands without federal 
government interference and oversight, we recognize the critical 
importance of the restoration of our land bases through the land-into-
trust process. We further recognize that the federal government has a 
trust responsibility and obligation to Tribal Nations in the 
restoration and management of trust lands. With this in mind, it is 
vital that the land-into-trust process be available to and applied 
equally to all federally recognized Tribal Nations. This parity is 
central to the federal government's legal and moral obligations to all 
of Indian Country.
    As Congress (and other branches of the federal government) 
approaches the restoration of Tribal homelands, USET SPF continues to 
repeat that this basic correction is simply that. It returns us to the 
status quo prior to 2009--a rigorous process for the acquisition of 
trust land for ALL federally recognized Tribal Nations. This long 
overdue fix does not confer any additional benefits or supersede any 
existing law, nor is it about anything other than the rightful 
restoration of Tribal homelands. USET SPF continues to call upon 
Congress to enact a fix to the 2009 Supreme Court decision in Carcieri 
v. Salazar. For too long, this decision has impeded our ability to 
rightfully restore our land bases and pursue Nation rebuilding efforts. 
Congress must enact legislation that: (1) reaffirms the status of 
current trust lands; and (2) confirms that the Secretary of the 
Interior has authority to take land into trust for all federally 
recognized Tribal Nations.
Support the Expansion of ISDEAA Contracting and Compacting Across the 
        Federal Government for Tribal Nations

    Tribal Nations are political, sovereign entities whose status stems 
from the inherent sovereignty we have as self-governing peoples that 
pre-dates the founding of the United States. The U.S. Constitution, 
treaties, statutes, Executive Orders, and judicial decisions all 
recognize that the federal government has a fundamental trust 
relationship to Tribal Nations, including the obligation uphold the 
right to self-government. Our federal partners must fully recognize the 
inherent right of Tribal Nations to fully engage in self-governance, so 
we may exercise full decision-making in the management of our own 
affairs and governmental services.
    Despite the success of Tribal Nations in exercising authority under 
the Indian Self-Determination and Education Assistance Act (ISDEAA), 
the goals of self-governance have not been fully realized. Many 
opportunities still remain to improve and expand upon the principles of 
self-governance and self-determination. An expansion of ISDEAA 
authorities to all programs across the federal government would be the 
next evolutionary step in the federal government's recognition of 
Tribal sovereignty and reflect its full commitment to Tribal Nation 
sovereignty and self-determination. The expansion of self-governance 
contracting and compacting will not only empower us to better serve our 
citizens and communities, but it will enhance our abilities to manage 
our lands. It would empower Tribal Nations to administer federal 
programs in co-management, stewardship, agriculture, deployment and 
maintenance of critical infrastructures, and pursue economic 
development on our lands. It is time for Congress to enact legislation 
that expands our self-governance capabilities across the federal 
government so that we may fully exercise our inherent sovereign rights 
to manage our affairs and resources.
Invest in and Rebuild Tribal Infrastructure--A Marshall Plan for Tribal 
        Nations

    For generations, the federal government--despite abiding trust and 
treaty obligations--has substantially under-invested in Indian 
Country's infrastructure and engaged in hostile actions against Tribal 
Nations to destroy our Tribal economies and undermine our efforts to 
pursue Nation rebuilding. While the United States faces crumbling 
infrastructure nationally, there are many in Indian Country who lack 
even basic infrastructure access. Much like the U.S. investment in the 
rebuilding of European nations following World War II via the Marshall 
Plan, the legislative and executive branches should commit to the same 
level of responsibility to assisting in the rebuilding of Tribal 
Nations, as our current circumstances are, in large part, directly 
attributable to the shameful acts and policies of the U.S. In the same 
way the Marshall Plan acknowledged America's debt to European 
sovereigns and was utilized to strengthen our relationships and 
security abroad, the U.S. should make this strategic investment 
domestically. We strongly encourage and recommend that SIIA, and 
Congress as a whole, review USET SPF's 2022 publication, ``Marshall 
Plan for Tribal Nations: A Restorative Justice and Domestic Investment 
Plan'', and enact legislation that upholds the federal government's 
trust and treaty obligations, advances Tribal self-determination, and 
supports our Nation rebuilding efforts.
Congress and SIIA Must Incorporate the Directives of E.O. 14112 into 
        Legislation

    USET SPF stresses to Congress and the Subcommittee that legislative 
efforts must be pursued to incorporate the directives of Executive 
Order 14112, ``Reforming Federal Funding and Support for Tribal Nations 
to Better Embrace our Trust Responsibilities and Promote the Next Era 
of Tribal Self-Determination.'' This will support our inherent 
sovereignty and self-determination to advance economic growth, pursue 
Nation rebuilding, and directly address the specific economic, social, 
and public health priorities of our citizens. The current service model 
of federal funding allocation, administration, and oversight remains a 
paternalistic, pre-self-determination era mechanism that stifles the 
proper management and use of federal resources in Indian affairs. In 
order to usher in a new era of Tribal self-determination, federal laws 
and regulations must be rescinded or revised to truly advance our 
sovereign efforts to pursue economic development and Nation rebuilding 
for the improved economic, social, and public health of our 
communities. We remind Congress and the Subcommittee, however, that no 
level of economic success attained by Tribal Nations diminishes or 
eliminates the United States' moral and legal trust and treaty 
obligations to fully fund Tribal programs and services.

Conclusion

    The diversification of Tribal economies to create increased 
economic opportunities for Indian Country must take into consideration 
several issues and priorities to support Tribal Nation rebuilding 
efforts. The historic and ongoing injustices that have contributed to 
economic insecurity in Indian Country are symptomatic of the larger 
issues we face as Tribal Nations. Development and implementation of 
policies and programs that recognize and uphold our inherent 
sovereignty and fulfill trust and treaty obligations are necessary to 
alleviate economic hardship, rebuild Tribal Nations, and improve the 
quality of life for our citizens and communities. Congress and the 
Subcommittee must continue to support and fully fund federal programs 
and services that encourage economic sovereignty through tax parity, 
responsible energy development, clarification of the tax status of 
TCCs, the restoration of Tribal homelands, expansion of self-governance 
contracting and compacting across all federal programs, and enactment 
of a Marshall Plan for Tribal Nations. Further, we strongly urge 
Congress and the Subcommittee to incorporate into legislation the 
directives of Executive Order 14112, ``Reforming Federal Funding and 
Support for Tribal Nations to Better Embrace our Trust Responsibilities 
and Promote the Next Era of Tribal Self-Determination.'' This will 
ensure that all federal economic development dollars available to 
Tribal Nations have the greatest degree of flexibility in uses and 
reduced administrative burdens to support our self-determined efforts 
to advance economic growth, pursue Nation rebuilding, and address the 
specific economic, social, and public health priorities of our 
citizens. We welcome the opportunity to collaborate with the 
Subcommittee on economic policies that better honor federal trust and 
treaty obligations and uphold our inherent sovereignty to pursue our 
Nation rebuilding priorities to support economic opportunities for our 
Tribal Nations and citizens. Should you have any questions or require 
further information, please contact Ms. Liz Malerba, USET SPF Director 
of Policy and Legislative Affairs, at [email protected].

            Sincerely,

        Chief Kirk Francis,           Kitcki A. Carroll,
        President                     Executive Director

                                 [all]