[Senate Report 116-28]
[From the U.S. Government Publishing Office]


                                                   Calendar No. 63

116th Congress}                                            { Report
                                 SENATE
 1st Session  }                                            { 116-28

======================================================================
 
TO AMEND THE NATIVE AMERICAN BUSINESS DEVELOPMENT, TRADE PROMOTION, AND 
   TOURISM ACT OF 2000, THE BUY INDIAN ACT, AND THE NATIVE AMERICAN 
   PROGRAMS ACT OF 1974 TO PROVIDE INDUSTRY AND ECONOMIC DEVELOPMENT 
                  OPPORTUNITIES TO INDIAN COMMUNITIES

                                _______
                                

                 April 8, 2019.--Ordered to be printed

                                _______
                                

    Mr. Hoeven, from the Committee on Indian Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 212]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 212) to amend the Native American Business 
Development, Trade Promotion, and Tourism Act of 2000, the Buy 
Indian Act, and the Native American Programs Act of 1974 to 
provide industry and economic development opportunities to 
Indian communities, having considered the same, reports 
favorably thereon without amendment and recommends that the 
bill do pass.

                                PURPOSE

    The purpose of S. 212 is to amend three Federal laws 
relating to business, economic, and trade development in Indian 
communities. These amendments are intended to increase access 
to capital for Indian tribes and businesses, increase 
opportunities for Indian business promotion, and create 
mechanisms and tools to attract investments in Indian 
communities.

                          NEED FOR LEGISLATION

    The Committee has held numerous hearings and listening 
sessions at which Indian tribal leaders, business owners, and 
entrepreneurs testified regarding significant challenges to 
economic development in Indian communities. The most prevalent 
problem has been accessing capital to start, build, and grow 
businesses. Long-range planning and coordination for tribal 
community development to facilitate business growth has also 
been an issue for many Indian tribes. Moreover, Federal 
programs which assist economic development have not been 
adequately supportive of Indian communities' economic growth.
    Despite these problems, the Committee is confident that the 
potential for long-term sustainable and stable economies exists 
and can be fulfilled through both legislative and 
administrative improvements.
    The bill, S. 212, is an important first step toward these 
goals and addressing these problems. Moreover, this bill can 
help create jobs at the local level and assist small business 
growth and development and assist Indian tribes to engage in 
more cohesive community development. In addition, S. 212 
reduces the costs of engaging in economic development projects 
in Indian communities by rolling back Federal bureaucratic 
oversight.

                               BACKGROUND

    The prospect of prosperity often falls short in many Indian 
communities across the nation. Too many of these communities 
across the nation face unique and daunting challenges. High 
rates of unemployment, crime, and poverty and other problems 
are compounded by the lack of adequate infrastructure, rugged 
terrain, and geographic isolation of these communities.
    In fact, many of these problems have persisted for years. 
The Committee noted that:

          The unemployment rate for American Indian and Alaskan 
        Native populations continues to hover at 50%, with some 
        Native communities suffering unemployment rates of 80-
        90%. In addition, American Indians and Alaskan Natives 
        have the highest poverty rate in the country at 30%. 
        These statistics reflect a variety of factors including 
        poor physical infrastructure, lack of human capital, 
        lack of access to financial capital, a long-standing 
        dependence on [F]ederal transfer payments, and an 
        almost non-existent private sector economy in Native 
        communities.\1\
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    \1\S.Rpt 106-149, 106th Cong., 1st Sess., Sept. 8, 1999, at 2.

    The Federal government continues its efforts to address 
this troubling reality, but Tribes feel more efforts are 
needed. In her testimony before this Committee on behalf of the 
Department of the Interior, Ms. Cheryl Andrews-Maltais stated 
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that:

          Native communities have experienced disproportional 
        barriers to economic development. Economic development 
        is critical for building capacity in Indian Country in 
        other areas such as law enforcement, health, education, 
        natural resource management, and infrastructure. Even 
        in good economic times, the unemployment rate in these 
        communities and villages is double the national 
        average.\2\
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    \2\Legislative Hearing on S.2285, S.3234, S.3261, and H.R.4685 
Before the S.Comm. Indian Affairs, 114 Cong. 2 (2016) (Statement of 
Cheryl Andrews-Maltais, Sr. Policy Adv., A. Sec. on Indian Affairs, 
U.S. Dep't of the Interior, at 11).

    Ms. Alejandra Castillo, on behalf of the Department of 
Commerce, reiterated that ``by any socioeconomic indicator, 
Native Americans are the most underserved population in the 
Country.''\3\
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    \3\Accessing Capital in Indian Country, Hearing Before the S. Comm. 
Indian Affairs, 114 Cong. 1 (2015) (Statement of Alejandra Castillo, at 
3).

    Mr. Michael R. Smith, also on behalf of the Department of 
the Interior, has further elaborated on the economic inhibitors 
Indian communities face in trying to build stable and 
sustainable economies which ultimately will reduce unemployment 
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and help reduce a host of other social problems:

          While each Tribal community and their economy is 
        unique, there are a number of common factors that have 
        inhibited economic development in Indian Country. 
        Primary road blocks include, one, lack of collateral in 
        which Tribes and reservation businesses can obtain 
        capital; number two, lack of a business development 
        environment; number three, lack of physical and legal 
        infrastructure; number four, difficulty in developing 
        natural resources due to multiple governments having 
        regulatory and taxing jurisdiction over development; 
        number five, lack of educational and training 
        opportunities to develop a skilled work force; and 
        number six, lack of access to modern technology.\4\
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    \4\Strengthening Self-Sufficiency: Overcoming Barriers to Economic 
Development In Native Communities, Field Hearing Before the S. Comm. 
Indian Affairs, 112 Cong. 1 (2011) (Statement of Michael R. Smith, Dep. 
Bureau Dir., Field Operations, Bureau of Indian Affaris, U.S. Dep't of 
the Interior, at 3).

    The Committee has long focused on and prioritized helping 
``Indian communities to prosper and to enjoy healthier 
lives.''\5\ In a 2015 hearing, then-Chairman of the Committee, 
Senator John Barrasso stated that ``fundamental to these goals 
is the need to build sustainable tribal economies and create 
jobs in Indian communities. Economic development and the 
capital necessary for that development are significant needs in 
Indian communities.''\6\ These Indian communities ``are located 
in remote areas, far away from transportation, distribution, or 
communication systems suitable for sustainable commerce.''\7\
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    \5\Accessing Capital in Indian Country, Hearing Before the S. Comm. 
Indian Affiars 114 Cong. 1 (2015) (Statement of John Barrasso, 
Chairman, S. Comm. Indian Affairs, at 1).
    \6\Id.
    \7\Id.
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                                OVERVIEW

    This legislation, S. 212, would amend three Federal laws 
relating to economic development in Indian communities: the 
Native American Business Development, Trade Promotion, and 
Tourism Act of 2000, the Native American Programs Act, and the 
Buy Indian Act.
    Native American Business Development, Trade Promotion, and 
Tourism Act of 2000. S. 212 would amend the Native American 
Business Development, Trade Promotion, and Tourism Act of 2000 
to:
           Require coordination between the Secretaries 
        of Commerce, Interior, and Treasury to develop 
        initiatives encouraging investment in Indian 
        communities;
           Elevate the Director of Indian Programs in 
        the Department of Commerce and authorize the funding 
        for operations; and
           Make permanent the waiver of the requirement 
        for Native CDFIs to provide a matching cost share for 
        assistance received by the Treasury CDFI.
    The Committee noted long ago that ``better coordination of 
[F]ederal Indian economic development programs and resources 
will promote greater efficiency as tribes, tribal members, 
private sector representatives, and individuals engage in 
business development on Indian lands.''\8\ To that end, during 
the 106th Congress, the Committee favorably reported S. 401, 
which proposed the establishment of an Office of Native 
American Business Development in the Department of Commerce. 
The Committee included the establishment of that Office in the 
legislation ``to promote both intra-agency and inter-agency 
coordination of [F]ederal programs that affect Indian economic 
development.''\9\ This provision became a part of S. 2719, 
which passed both the Senate and the House of Representatives 
and was signed into law by the President as P.L. 106-464.
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    \8\S.Rpt.106-149, 106th Cong., 1st Sess., Sept. 8, 1999, at 2.
    \9\Id.
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    The Committee, however, is concerned that implementation of 
P.L. 106-464 has not aligned with Congressional intent and has 
been ineffective at promoting economic development and reducing 
poverty and unemployment in Indian communities. This 
legislation, S. 212, would advance these goals in a more 
effective manner by elevating the Office and ensuring proper 
Secretarial attention to the economic development needs of 
Indian Country.
    The legislation would further increase the coordination 
among and accountability of the Federal agencies as well. The 
Secretaries of Commerce, Interior, and Treasury would be 
required to collaborate to promote investment in Indian 
communities, identify barriers to such investments, and ensure 
consultation with Indian tribes. Not less than every three 
years, these Secretaries would be required to report to 
Congress on the results of the initiatives developed.
    This coordination is necessary, not only for developing 
initiatives, but also for collecting information and data 
needed to identify and reduce barriers to investments. Mr. 
Black, testifying on behalf of the Department of the Interior, 
explained that ``for the United States to adequately identify 
and focus on unemployment in Indian Country, we must first 
collect reliable data that will allow us to track progress over 
time.''\10\
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    \10\Strengthening Self-Sufficiency: Overcoming Barriers to Economic 
Development In Native Communities'' Field Hearing before the S.Comm. 
Ind. Aff. August 17, 2011. 112th Cong., at 5.
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    The Department of Commerce, particularly through the Office 
of Native American Business Development, has already developed 
a variety of cooperative programs. Ms. Castillo testified 
before this Committee that the Minority Business Development 
Agency of the Department of Commerce ``work[s] closely with 
other Federal agencies outside the Department of Commerce such 
as the Small Business Administration and Treasury to leverage 
existing programs that increase capital opportunities for MBEs 
through micro lending, community development, financial 
institutions, and other loan guarantee programs.''\11\
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    \11\Accessing Capital in Indian Country. Hearing before the S.Comm. 
Ind.Aff., June 17, 2015. Statement of Alejandra Castillo, at 4.
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    This cooperation has led to relatively significant results. 
For example, this ``network center has served 1,100 American 
Indian and Alaskan Native firms. Further, over the past six 
fiscal years, FY 2009 through FY 2014, the MBDA has assisted 
Native American clients in accessing over $1.8 billion in 
capital.'' The Committee strongly believes that additional 
cooperation, collaboration, and consultation with Indian 
Country could lead to even more remarkable results.
    In increasing access to capital, the Native Community 
Development Financial Institutions (CDFIs) have been relatively 
successful in delivering capital to underserved Indian 
communities. Mr. Dennis Nolan, on behalf of the Department of 
the Treasury, acknowledged that ``[t]he CDFI Fund's work in 
Indian Country is born of an awareness that Native communities 
all across the Nation face extraordinary economic challenges 
and limited access to capital.''\12\
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    \12\Economic Development: Encouraging Investment in Indian Country, 
Hearing Before the S. Comm. Indian Affairs, 113 Cong. 2 (2014) 
(Statement of Dennis Nolan, Acting Dir., Community Dev. Financial 
Institutions, U.S. Dep't of the Treasury, at 2).
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    Mr. Nolan testified, ``In 2001, the CDFI published the 
landmark Native American Lending Study . . . [which] identified 
17 major barriers that limit access to capital in Native 
communities and offered a variety of recommendations to address 
them.''\13\ Within ten years, the number of Native CDFIs grew 
from just a few to 68 in 21 states.\14\
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    \13\Id.
    \14\Id.
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    These Native CDFIs typically provide microloans up to 
$250,000 for Indian businesses and entrepreneurs, with an 
average loan of approximately $24,000.\15\ From 2004 to 2014, 
``Native CDFIs that received NACA program awards [from the 
Department of the Treasury's Native American CDFI Assistance 
Program] made over 15,000 loans totaling $365 million in Native 
communities.''\16\ Additionally, ``[c]ertified CDFIs made 
almost 7,000 loans and investments totaling $184 million in 
Native communities. Native CDFIs reported that their loans and 
investments created or retained more than 2,000 jobs.''\17\
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    \15\The University of Arizona Native Nations Institute, ``Access to 
Capital and Credit in Native Communities,'' (May 2016), at 14.
    \16\Id.
    \17\Economic Development: Encouraging Investment in Indian Country, 
Hearing Before the S. Comm. Indian Affairs, 113 Cong. 2 (2014) 
(Statement of Dennis Nolan, Acting Dir., Community Dev. Financial 
Institutions, U.S. Dep't of the Treasury, at 3.
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    Native CDFIs receive some Federal funding to make these 
loans. In its annual Appropriation Acts, Congress waives the 
cost share requirement for the respective fiscal year for 
Native CDFI awardees. This legislation, S. 212, would make that 
waiver permanent. With a permanent waiver, Native CDFIs can 
more efficiently provide access to capital to underserved 
Indian communities.
    The Committee reiterates Mr. Nolan's statement that ``[the 
Treasury CDFI Fund's] work and the work of every Native CDFI is 
about changing lives and building stronger, more resilient 
communities.''\18\ This serious mission mandates that every 
effort be taken to strengthen and support this important tool 
for Indian community economies.
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    \18\Id.
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    Native American Programs Act. The bill would amend the 
Native American Programs Act to:
           Reauthorize the economic development 
        programs;
           Prioritize grant applications for building 
        tribal court systems and code development for economic 
        development; supporting CDFIs; and developing master 
        plans for community and economic development; and
           Prioritize groups engaged in the above 
        mentioned activity when providing technical advice.
    In 2001, then-Vice Chairman of the Committee, Senator Ben 
Nighthorse Campbell, stated that ``it is increasingly apparent 
that the kind of governing environment that a tribe has in 
place will determine whether or not businesses will prosper and 
jobs and income will flow.''\19\ He further elaborated that 
``[b]y `good governance' I mean stable institutions with 
administrative capacity, fair and effective dispute resolutions 
with an appeals process, a separation of politics from business 
management and transparency in government, to name a few.''\20\
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    \19\Indian Tribal Good Governance Practices as they Relate to 
Economic Development, Hearing Before the S. Comm. Indian Affairs, 107 
Cong. 1 (2001) (Statement of Sen. Ben Nighthorse Campbell, V. Chairman, 
S. Comm. Indian Affairs, at 1).
    \20\Id.
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    Mr. Andrew Lee, testifying before the Committee, noted that 
``[g]overnance goes a long way toward explaining why some 
tribes are able to break poverty, dependency and their related 
social ills while others languish.''\21\ He further explained 
that based on research from the Harvard Project, ``[t]ribal 
enterprises that are formally insulated from political 
interference are four times as likely to be profitable from 
those that are not.''\22\
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    \21\Indian Tribal Good Governance Practices as they Relate to 
Economic Development, Hearing Before the S. Comm. Indian Affairs, 107 
Cong. 1 (2001) (Statement of Andrew Lee, Ex. Dir., Harvard Proj. on 
American Indian Econ. Dev., John F Kennedy Sch. Of Gov., Harvard Uni., 
at 28).
    \22\Id. at 29.
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    The November 2001 Report of the Native American Lending 
Study noted that ``one major barrier to capital access related 
to legal infrastructure'' was the ``uncertain tribal commercial 
laws and regulations and the absence of an independent 
judiciary.''\23\ In testimony before the Committee, Mr. Derrick 
Watchman, Chairman of the Board of the National Center for 
American Indian Enterprise Development (NCAIED), underscored 
that finding.
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    \23\The Report of the Native American Lending Study. Community 
Development Financial Institutions Fund. U.S. Dept. of the Treasury. 
November, 2001, at 4.
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    A banker by trade, Mr. Watchman testified before the 
Committee on how tribal governments, the banks, and the Federal 
Government could facilitate access to capital in Indian 
Country.\24\ He stated, ``it is very helpful for tribal 
governments to establish a uniform commercial code 
system.''\25\ Businesses can utilize such systems to resolve 
commercial disputes in fair and equitable ways in tribal 
courts. With access to capital highlighted as one of the most 
prevalent problems for tribal economic development, the need to 
address the legal infrastructure issues is a significant 
priority. Various Federal programs provide tribal court funding 
for code development, but these are usually designed to address 
criminal justice needs.
---------------------------------------------------------------------------
    \24\ Accessing Capital in Indian Country, Hearing Before S. Comm. 
Indian Affairs, 114. Cong. 1 (2015) (Statement of Derrick Watchman, 
Chairman, Board of Dir.'s, National Center for American Indian 
Enterprise Dev, at 8).
    \25\Id.
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    Rather than divert resources designed to build tribal 
criminal justice capacity, the Committee turned to the social 
and economic development programs authorized by the Native 
American Programs Act to assist in developing the legal 
infrastructure necessary for increasing access to capital.
    Mr. Watchman further testified that ``[s]trategic clarity 
(with strategies that are aligned with community ideals and 
backed with community support)'' is an important consideration 
for tribal policymakers in facilitating economic development. 
To that end, S. 212 prioritizes the development of tribal 
master plans for community and economic development as 
authorized activities for the Native American Programs Act's 
grant programs. The Harvard Project findings also suggest that 
such master plans will be useful in promoting economic 
development. The Project has found that ``successful economies 
in Indian Country stand on the shoulders of culturally 
appropriate governing institutions.''\26\
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    \26\Indian Tribal Good Governance Practices as they Relate to 
Economic Development, Hearing before the S. Comm. Indian Affairs, 107 
Cong. 1 (2001) (Statement of Andrew Lee, Ex. Dir., Harvard Proj. on 
American Indian Econ. Dev., John F Kennedy Sch. Of Gov., Harvard Uni., 
at 29).
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    However, the grants authorized by the Native American 
Programs Act neither prioritized nor encouraged a focus on 
legal infrastructure building or master planning for economic 
development purposes. This legislation, S. 212, would change 
this by restructuring the priorities among the social and 
economic development grants so that the following applications 
would receive priority consideration: those that would provide 
technical assistance related to building tribal court systems 
and codes; those that develop Native CDFIs; and those that 
promote master planning for economic development purposes.
    Those priorities, however, would only extend to fifty 
percent of the funding for the Act's social and economic 
development programs. This is necessary to ensure that a 
variety of economic development projects are funded through 
these programs each year.
    According to the officials of the Administration for Native 
Americans, which administers these grants, the current method 
for selecting grantees does not have set percentages for 
different types of projects; nor does it otherwise distinguish 
among them. Grants are awarded based only on the number of 
points received during the assessment process.
    Because there are so many applications, a priority 
structure without caps based on project type could potentially 
exhaust all funding on one or two types of projects, at the 
expense of all other economic and social projects. By requiring 
that only fifty percent of available grant funding be governed 
by the bill's priority structure, S. 212 can achieve its twin 
ends of prioritizing the projects that research has shown are 
most fundamental to increasing access to capital, and not 
impeding other types of economic development projects.
    Buy Indian Act. The bill would amend the Buy Indian Act to:
           Facilitate agency compliance with the Buy 
        Indian Act's provisions when covered agencies, such as 
        the Bureau of Indian Affairs (BIA) and Indian Health 
        Services (IHS), engage in procurement; and
           Require more accountability in implementing 
        this Act.
    The Buy Indian Act was enacted in 1910. The Bureau of 
Indian Affairs ``has obtained services and supplies from Indian 
sources using the Buy Indian Program since 1965, based on 
policy memoranda and acquisition.''\27\
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    \27\78 F.R. 34266 (June 7, 2013).
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    In 2013, the Bureau of Indian Affairs issued regulations to 
``describe[] uniform administrative procedures that [the 
agency] will use in all of its locations to encourage 
procurement relationships with eligible Indian Economic 
Enterprises in the execution of the Buy Indian Act.''\28\ On 
the other hand, the Indian Health Service, to which the Buy 
Indian Act also applies, has yet to issue regulations governing 
its use of the Buy Indian Act.
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    \28\ Id. 
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    Indian business owners and entrepreneurs have long 
expressed concerns that both agencies have not fully or 
appropriately implemented the Buy Indian Act, thereby denying a 
significant amount of business to Indian entrepreneurs.\29\ 
According to Michael G. Anderson, Executive Director for the 
Native American Contractors Association:
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    \29\See Economic Development: Encouraging Investment in Indian 
Country.

          The Federal Procurement Data System shows that since 
        [F]iscal [Y]ear 2013, the [BIA] has procured $103.3 
        million under Buy Indian [sic] out of $1.22 billion 
        spent (8.5 percent). At the same time, the [IHS] 
        procured $15.1 million under Buy Indian [sic] out of 
        $3.3 billion spent (0.5 percent). If we were to assume 
        a Buy Indian [sic] goal of just 23 percent--the goal 
        for [F]ederal small business contracting--that would 
        translate to $200 million more in potential BIA 
        opportunities and $800 million more in potential IHS 
        opportunities.\30\
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    \30\Michael G. Anderson. Tribal Business Journal. Buy Indian Act. 
Available at http://tribalbusinessjournal.com/news/buy-indian-act/.

    Mr. Anderson, who before House Committee on Natural 
Resources Subcommittee on Indian, Insular, and Alaska Native 
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Affairs last Congress, further testified that:

          The investment impact to Native communities is 
        quantifiable. For Interior every 1% increase in Buy 
        Indian awards equates to a $118 million increase. 
        Assuming a conservative 5% profit to IEEs, a 1% 
        increase equates to $5.9 million in economic 
        development to Native communities. For IHS, every 1% 
        increase in Buy Indian awards equates to a $30 million 
        increase. Using the same 5% profit, a 1% increase 
        translates to $1.5 million in economic development 
        available to Native communities.\31\
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    \31\Legislative Hearing on S. 607 and S. 1116 Before H. Comm. on 
Nat. Res. Subcom. on Indian, Insular, and Alaska Native Affairs, 115th 
Cong. 2 (2018) (Statement of Michael G. Anderson, Executive Director, 
Native American Contractors Association).

    At a Committee on Indian Affairs hearing in the 114th 
Congress, the Department of Interior's Senior Policy Advisor to 
the Acting Assistant Secretary on Indian Affairs Ms. Andrews-
Maltais testified, ``Buy Indian Act is an important component 
of the Department's goal of fostering and supporting American 
Indian/Alaska Native entrepreneurship.''\32\
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    \32\Legislative Hearing on S. 2285, S. 3234, S. 3261, and H.R. 4685 
Before the S. Comm. Indian Affairs, 114 Cong. (2016) (Statement of 
Cheryl Andrews-Maltais, at 12).
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    Although the new BIA regulations have been issued to 
improve such procurement, the Committee strongly believes that 
legislative refinements are needed to ensure that the Buy 
Indian Act will be implemented more fully and consistently 
throughout both the BIA and IHS. S. 212 codifies several 
provisions of BIA's regulations, adds more training 
requirements, and increases accountability for both agencies. 
The Committee expects that the agencies will expeditiously and 
consistently implement these provisions.

                          LEGISLATIVE HISTORY

    On January 24, 2018, Senator Hoeven introduced S. 212. 
Senator McSally joined as a co-sponsor on February 4, 2019. The 
Senate referred the bill to the Committee on Indian Affairs. On 
January 29, 2019, the Committee met at a duly called business 
meeting to consider S. 212, among other bills. By voice vote, 
the Committee ordered the bill, without amendment, favorably 
reported to the Senate.
    In the 115th Congress, Senator Hoeven introduced S. 1116, a 
similar predecessor bill, on May 11, 2017. Senator McCain 
joined him as an original co-sponsor. The bill was referred to 
the Committee on Indian Affairs, which held a business meeting 
on May 17, 2017, to consider the bill. Senator Cortez Masto 
proposed an amendment, which the Committee adopted, that 
provided changes to the consultation procedures between the 
Securities and Exchange Commission and Indian tribes. The 
Committee ordered the bill, as amended, reported favorably.
    On March 22, 2018, the Senate passed S. 1116 by voice vote 
and sent the bill to the House of Representatives, which 
referred it to the Committees on Natural Resources and on 
Education and the Workforce. On July 24, 2018, the Subcommittee 
on Indian, Insular and Alaska Native Affairs of the Committee 
on Natural Resources held a hearing on the bill. The House of 
Representatives took no further action on the bill.
    In the 114th Congress, Senator Barrasso introduced S. 3234, 
a similar predecessor bill, on July 24, 2016. Senator McCain 
joined him as an original co-sponsor. The Senate referred the 
bill to the Committee on Indian Affairs. On September 7, 2016, 
the Committee held a legislative hearing on the bill. Ms. 
Cheryl Andrews-Maltais testified on behalf of the Department of 
the Interior in support of the bill and recommended technical 
refinements for the bill.
    On September 21, 2016, the Committee held a duly called 
business meeting to consider S. 3234. Senator Barrasso offered 
a substitute amendment which made a number of technical or 
clarifying, conforming, and substantive changes to the bill as 
introduced.
    The technical or clarifying changes occurred in:
           the findings in Section 2 of the bill;
           the duties of the Director in Section 3;
           the position responsible for interagency 
        coordination in Section 3;
           the permanent waiver of the cost sharing 
        requirement for Native CDFIs in Section 3; and
           the reporting requirements under the Buy 
        Indian Act in Section 4.
    The substitute amendment's conforming changes modified the 
definitions in Section 3 of the bill by striking the 
definitions of ``Fund'' and ``Native community development 
financial institution'' and clarifying ``Native community 
development financial institution''.
    For the interagency coordination initiatives in Section 3, 
the substitute amendment:
           included Indian organizations with 
        experience in providing entrepreneurial training as 
        participants in these initiatives;
           required the agencies to work with the 
        Authority established in 2000 to identify barriers to 
        increasing investments and economic measures in Indian 
        communities; and
           required a report (every 3 years) to 
        Congress regarding improvements to Indian communities 
        from these initiatives.
    The amendment additionally made the following changes:
           Replaced the Indian Economic Development 
        Fund with a GAO study on Federal capitalization 
        programs, capital needs and demand in Indian 
        communities, extent of and comparison between Indian 
        and non-Indian use of these programs;
           Struck the definition of ``Fund,'' and 
        clarified the definition of ``Native Community 
        Development Financial Institution'' in Section 3;
           Struck the Indian Trader Act provisions from 
        the bill; and
           Set a fifty percent cap on the amount of 
        grant funding for the Native American Programs Act 
        social and economic development programs which would be 
        governed by the priorities set forth in S. 3234.
    The Committee adopted the amendment and ordered the bill, 
as amended, reported favorably. The Congressional Budget Office 
did not issue a cost estimate prior to the end of the 114th 
Congress. The Senate took no further action on the bill.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title

    Section 1 sets forth the short title of the bill as the 
``Indian Community Economic Enhancement Act of 2019''.

Section 2. Findings

    Section 2 sets forth the findings which state that Indian 
tribes must overcome many barriers to bring industry and 
economic development to Indian communities. These barriers 
include geographic location, lack of infrastructure, lack of 
sufficient collateral and capital, and regulatory bureaucracy. 
These barriers increase the costs of doing business in Indian 
communities.
    The Federal government has an important government-to-
government relationship with tribes, and a role in facilitating 
healthy and sustainable tribal economies. The input of tribes 
is important for developing Federal policies and programs 
designed to assist Indian tribes and Indian entrepreneurs in 
building tribal economies.
    Tribal infrastructure needs repair, but access to private 
capital is limited. Federal capital improvement programs, such 
as loan guarantees and programs that facilitate tax-exempt bond 
financing, can help build tribal infrastructure.
    Tribes are not treated as states or local governments under 
federal tax and regulatory law, which impedes their ability to 
raise capital, invest, and benefit from other investment 
incentives. As a result, investors may avoid financing in 
Indian communities, making economic projects costly and 
inaccessible. In order to facilitate private financing for 
urgent development needs, federal loan programs specific to 
Indian communities need support. Tribal trust or restricted 
property cannot be held as collateral. Transactions involving 
trust or restricted property, such as leases or rights-of-ways, 
are subject to the Bureau of Indian Affairs' approval process 
which adds delays or costs to projects.

Section 3. Community development

    Section 3 amends the Native American Business Development, 
Trade, Promotion, and Tourism Act of 2000 (25 U.S.C. 4301) by 
clarifying policies, adding definitions, and creating two new 
subsections. This section would ensure that the findings and 
purposes of trade promotion and business development apply to 
all Indian businesses, not just those that seek assistance 
pursuant to this statute.
    This section would add definitions for the ``Director'' 
(which is referenced but not defined in current law); ``Native 
Community Development Financial Institutions (CDFIs)'' which 
are CDFIs authorized under Section 103 of the Community 
Development Banking and Financial Institutions Act of 1994 
serving Indian reservations or tribes; and ``Office'' which is 
the Office of Native American Business Development within the 
Department of Commerce.
    This section describes the role of the Director of the 
Office of Native American Business Development, giving the 
holder of that office significant responsibility. The Director 
would report to the Secretary of Commerce, and serve as the 
policy advisor on the trust responsibility and as the point of 
contact for Indian tribes for Departmental programs. The 
Director would be required to coordinate with all Department 
offices and agencies to ensure there is an accountable process 
for consultation regarding Departmental programs and policies. 
This section also caps the amount of funding authorized for the 
operations of this Office at $2 million per fiscal year.
    This section adds a new Section 8 (25 U.S.C. 4307) to 
Native American Business Development, Trade Promotion, and 
Tourism Act of 2000, and would:
           Require, not later than one year after 
        enactment, interagency coordination between the 
        Secretaries of Interior, Commerce, and Treasury to 
        develop initiatives
           to encourage investments in Indian 
        communities, examine collateral alternatives, and use 
        tribal colleges to provide entrepreneurial training;
           to identify regulatory or legal barriers 
        to increasing such investments; and to consult with 
        Indian tribes regarding increasing such investments;
           Require, at least once every three years, a 
        report to Congress that details the impact of these 
        initiatives on Indian communities;
    Require consultation between the Securities and Exchange 
Commission (SEC) and Indian tribes on statutory or regulatory 
changes needed for Indian tribes to qualify as an accredited 
investor under SEC regulations, so that Indian tribes have the 
ability to withstand investment loss on a basis comparable to 
other legal entities who are not natural persons; and
           Require that the Government Accountability 
        Office conduct a study to assess current Federal 
        capitalization and programs that are available to 
        assist Indian communities with economic and community 
        development.
           The study shall assess the demand and 
        utilization of each program, the capital needs of 
        Indian tribes and communities related to economic 
        development, and the extent to which similar programs 
        have been used to assist non-Indian communities in 
        comparison.
           The GAO shall submit a report on the 
        findings of this study to the Senate Committee on 
        Indian Affairs and the House Committee on Natural 
        Resources not later than 18 months after the date of 
        enactment.

Section 4. Buy Indian Act

    Section 4 would amend the Buy Indian Act (25 U.S.C. 47) in 
three substantive ways.
    First, it would ensure that the Bureau of Indian Affairs 
and the Indian Health Service consider the Buy Indian Act in 
its procurement decisions by
           Requiring the agencies to utilize the Buy 
        Indian Act preferences unless the Departments determine 
        such procurement decisions would not be practicable and 
        reasonable; and
           Clarifying that facilities construction is 
        also authorized for Buy Indian Act consideration.
    In addition, this section would require:
           The Secretaries of Interior and Health and 
        Human Services to conduct outreach to Indian 
        businesses, provide training, and issue regulations;
           Regional office data on implementation;
           Procurement management reviews to include a 
        review of implementation of the Buy Indian Act; and
           Consultations with various stakeholders on 
        how compliance with this statute can be harmonized with 
        other procurement goals.
    This section would require a biannual report from the 
agencies on implementation, including:
           The names and efforts of each agency under 
        the respective Secretaries' jurisdiction and 
        Departments to which this Act applies;
           A summary of the purchases;
           Data on increases or decreases in usage;
           Methods for conducting market searches for 
        qualified vendors;
           A summary of deviations;
           The total number and dollar amount of 
        contract awards;
           Any administrative or legal barriers to 
        achieving the goals of the statute; and
           Recommendations for legislative or 
        administrative actions to address the barriers.

Section 5. Native American Programs Act

    Section 5 amends the Native American Programs Act of 1974 
(42 U.S.C. 2991) in three substantive ways.
    First, for economic development programs administered under 
this Act, this section would authorize Native CDFIs to be 
eligible grantees. It also creates a priority structure for the 
grant assessment process, giving priority to those applicants 
whose programs seek to develop tribal codes and court systems 
relating to economic development; aim at developing nonprofit 
subsidiaries or other tribal business structures; develop or 
maintain CDFIs; or develop tribal master plans for community 
and economic development and infrastructure.
    Additionally, the Commissioner of the Administration for 
Native Americans, who oversees the grant program, shall also 
prioritize projects that fall into the above mentioned 
categories when providing technical advice.
    Finally, this section reauthorizes the Act's grants for 
fiscal years 2018 through 2022 at level funding.

                    COST AND BUDGETARY CONSIDERATION

    The cost estimate for S. 212, as calculated by the 
Congressional Budget Office, is set forth below:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 5, 2019.
Hon. John Hoeven,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 212, the Indian 
Community Economic Enhancement Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jon Sperl.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

S. 212--To amend the Native American Business Development, Trade 
        Promotion, and Tourism Act of 2000, the Buy Indian Act, and the 
        Native American Programs Act of 1974 to provide industry and 
        economic development opportunities to Indian communities.

    S. 212 would reorganize the Office of Native American 
Business Development (ONABD) within the Department of Commerce 
(DOC), require that office to serve as the liaison between DOC 
and Indian tribes, and permanently authorize the appropriation 
of $2 million a year for that office (or $20 million through 
2029). Current law authorizes the appropriation of whatever 
amounts are necessary for ONABD operations; however, no funds 
have been appropriated for such purposes since ONABD was 
originally authorized.
    The bill also would authorize the appropriation of $34 
million a year from 2020 through 2024 (totaling $170 million 
over the five years) for the Department of Health and Human 
Services (HHS) to make grants to assist the social and economic 
development of Native American communities. The authority to 
make those grants expired at the end of 2002. However, HHS has 
continued to allocate funds each year for those grants from its 
appropriation. In 2018, the most recent year for which data is 
available, that allocation was $34 million.
    Finally, the bill would require DOC, the Department of the 
Interior, and the Department of the Treasury to develop 
coordinated initiatives to encourage investment in Indian 
communities. Using information from those departments, CBO 
estimates that implementing those requirements would have no 
significant effect on the federal budget.
    CBO assumes that the bill will be enacted in 2019 and that 
the authorized amounts will be appropriated each year. 
Estimated outlays are based on historical spending patterns and 
would total $144 million over the 2019-2024 period, CBO 
estimates.
    The costs of the legislation fall within budget functions 
450 (community and regional development) and 500 (education, 
training, employment, and social services) and are detailed in 
Table 1.

                                     TABLE 1.--ESTIMATED INCREASES IN SPENDING SUBJECT TO APPROPRIATION UNDER S. 212
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     By fiscal year, millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2019   2020   2021   2022   2023   2024   2025   2026   2027   2028   2029  2019-2024  2019-2029
--------------------------------------------------------------------------------------------------------------------------------------------------------
Department of Commerce:
    Authorization....................................      0      2      2      2      2      2      2      2      2      2      2        10         20
    Estimated Outlays................................      0      2      2      2      2      2      2      2      2      2      2        10         20
Department of Health and Human Services:
    Authorization....................................      0     34     34     34     34     34      0      0      0      0      0       170        170
    Estimated Outlays................................      0      1     31     34     34     34     33      3      0      0      0       134        170
Total Changes:
    Authorization....................................      0     36     36     36     36     36      2      2      2      2      2       180        190
    Estimated Outlays................................      0      3     33     36     36     36     35      5      2      2      2       144        190
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Although S. 212 contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act, 
tribal governments would benefit from the reauthorization of 
the Buy Indian Act. Such reauthorization would allow the award 
of federal contracts to Indian-owned businesses and bypass the 
standard competitive process. Tribal governments would benefit 
from provision in the bill promoting private investment in 
Indian communities. Any costs to tribal governments would 
result from complying with conditions of assistance.
    The CBO staff contacts for this estimate are Jon Sperl (for 
the Department of Commerce), Jennifer Gray (for the Department 
of Health and Human Services), and Rachel Austin (for 
mandates). The estimate was reviewed by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                      REGULATORY IMPACT STATEMENT

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires that each report accompanying a bill to 
evaluate the regulatory paperwork impact that would be incurred 
in implementing the legislation. The Committee has concluded 
that enactment of S. 212 will create only de minimis regulatory 
or paperwork burdens.

                        EXECUTIVE COMMUNICATIONS

    The Committee has received no official communications from 
the Administration on the provisions of this bill.

                        CHANGES IN EXISTING LAW

    In compliance with the Standing Rules of the Senate and the 
Committee Rules, subsection 12 of rule XXVI of the Standing 
Rules of the Senate is waived. In the opinion of the Committee, 
it is necessary to dispense with subsection 12 of rule XXVI of 
the Standing Rules of the Senate in order to expedite the 
business of the Senate.

                                  [all]