it is our tradition that we swear in witnesses before we begin thank you mister chairman members of the committee for the opportunity to testify today about the challenges associated with economic development on tribal lands and creation of jobs for american indians responsibility to american indians has consistently been a top management challenge for the department of the interior the myriad problems we have uncovered in bia portray programs that are sorely understaffed and poorly managed the oig has identified gross program inefficiencies at many levels at indian affairs and in tribal land management of federal funds let me summarize some of the more recent work we have done regarding the bureau of indian affairs the federal government has long acknowledged the complexity of land fractionation on indian trust operations fractionation is the result of dividing tribal land into parcels and allotting the parcels to individual indians the allotments are then subsequently divided among heirs through probate with each generation the amount of fractionation increases we are working with the department as it develops a comprehensive plan that will guide its efforts to significantly reduce fractionation we found that hmillion in roads funds were distributed by one region annually but only three to four million in roads projects had any physical oversight or verification of work by  and that as much as two hundred thousand dollars may have been overbilled by a subcontractor bia also mismanaged a hmillion dot funded ferryboat in alaska that turned into a private boat tour in each of these instances meaningful management oversight was quite simply absent nearly hyears ago the oig conducted a thorough assessment of indian country detention facilities our assessment revealed a long history of neglect and apathy on the part of bia officials which resulted in serious safety security and maintenance deficiencies at the majority of the detention facilities in indian country we recently completed an evaluation of bia's efforts to improve staffing levels at their detention facilities a critical issue directly impacting safety and security and a key recommendation from our two thousand and four report and the state of these facilities remains largely unchanged in february two thousand and ten the oig issued an evaluation of school violence prevention measures in tribally operated schools overall our evaluation revealed that many schools are dangerously unprepared to prevent violence and ensure the safety of students and staff that report on school violence was preceded by a report in august two thousand and eight weaknesses ten individuals including a bia agency superintendent have been indicted in connection with a decadelong fraud scheme to embezzle funds from a tribal credit program seven of the ten bia funded a nonexistent fish hatchery bia continued to fund the hatchery even after a superintendent visited the reservation and saw that the hatchery site had been converted into office space due to our resource limitations the oig refers many serious allegations of employee misconduct such as fraud theft retaliation and misuse of funds to the bia on a regular basis with the expectation that the issues will be appropriately resolved or that poor managers and other ethically challenged employees will be held accountable unfortunately bia more than any other bureau at interior has a history of failing to respond to oig referrals or even worse completely disregarding the serious matters referred to them thank you mister chairman for the opportunity to share this information with you i will be happy to answer any questions you or other members of the  mister chairman and members of the subcommittee i am pleased to be here today to participate in your hearing on challenges to the economic development in indian country as you know indian tribes are among the nation's most economically distressed groups and often lack basic infrastructure without such infrastructure tribes often find it difficult to compete successfully in the economic mainstream in addition our past work has identified several unique circumstances that exist in indian country that may create additional uncertainties or impediments for both tribes and private companies wishing to pursue economic activity in these areas i would like to briefly describe five of these unique circumstances for you the first unique circumstance that creates uncertainty relates to the landintrust status for indian land and thirty four the indian reorganization act provided the secretary of the interior discretionary authority to take land in trust on behalf of federally recognized tribes or their members trust status help secure these lands for tribal use and these lands are no longer subject to state and local property taxes and zoning ordinances however a two thousand and nine supreme court decision has created significant uncertainty regarding the landintrust status for a large number of tribes this is because the supreme court ruled that interior can only take land in trust for tribes that were under federal jurisdiction in and thirty four at this time it is unclear how many pending landintrust applications will be affected by this decision the second circumstance unique to indian country relates to tribal environmental standards the clean water act safe drinking water act and clean air act authorized the epa to treat indian tribes as states for the purposes of implementing these laws on tribal lands as sovereign governments tribes want to exercise this authority because they believe they are more familiar with their own environmental needs however states are concerned that allowing tribes to set these standards could result in  patchwork of standards within the state and potentially hinder a state's overall economic development plans our past work has indeed found that this authority has resulted in several disagreements between tribes and states in addition more stringent tribal standards could also act as a disincentive for companies who may choose to not operate their businesses on tribal lands because of these standards the third circumstance relates to the use of special tax provisions for indian reservations one example of such a special tax provision is allowing tribes to use taxexempt bonds to finance essential government functions on reservations use of taxexempt bonds lowers borrowing costs for tribes and provides higher aftertax yields to investors however it is unclear to what extent this provision has actually helped tribes because the irs has not yet issued regulations defining what activities are allowable under this provision without these regulations tribes have limited guidance to help them decide what function they can fund with taxexempt bonds the fourth circumstance relates to the complex process of obtaining rights of way across indian lands securing rights of way is an essential step to providing tribes with the critical infrastructure that they need to support economic activity however obtaining rights of way can be timeconsuming and expensive in part because interior must approve these applications several of the steps that service providers must take to get interior's approval involve negotiating with the landowners who can be individuals multiple owners or tribes if an individual allotment of indian land is owned by multiple owners sometimes reaching into the hundreds then this process can become even more onerous because federal regulations require that the majority of owners must approve a right of way before it can be finalized the final unique circumstance i would like to discuss is the legal and judicial systems that exist in indian country having effective legal and judicial systems is often considered a prerequisite to attracting private investment to tribal lands this is because such systems provide investors with assurance that disputes will be resolved fairly however the legal and judicial systems on tribal lands are fairly complex and tribes also have sovereign immunity these circumstances can act as disincentives for businesses who are trying to decide whether to operate on tribal or nontribal lands as you can see mister chairman there are a number of unique circumstances that tribes and business owners must consider when making decisions about whether or not to pursue economic development in indian country in some cases these circumstances can act as impediments this concludes my prepared statement i'd be happy to answer any questions mister lankford we look forward to that conversation thank you director  i would like to thank you for convening this hearing on regulatory barriers in american indian job creation the rosebud sioux indian reservation is located in south central south dakota our reservation consists of nine hundred thousand plus heavily upon his heart he has seen entirely too much poverty and tragedy on a daily basis among our people this underlying poverty has caused many social ills and issues now it has become so pronounced that an a our natural resources here are many we intend to use these resources to the best of abilities from grazing cattle to farming leases along with timber production in the future we seek to build our economy from of two thousand and three we built a seven hundred and fifty kilowatt neg micon turbine capable of providing enough energyh electricity for two hundred homes annually we call this project the casino turbine project because it is located next to our tribal casino this effort was accomplished through the assistance of a department of energy grant and a rural utility service loan through the u s department of ublic power district has expired disgen's efforts to make this project succeed are undeniable and they have in my view exhausted all efforts to work with nppc and southwest power pool is the only remaining significant issue that needs to be completed for ofwb it has identified three federal energy buyers that may apply for double recs points toward the renewable energy goals of the energy certificates to offutt air force base and nppd that could sell the energy and recs to the federal customers this project can be constructed by the end of two thousand and eleven the federal government can make this project happ trust responsibility is exercised in good faith we are not asking for monies to fund this project we are asking the federal government to assist us in efforts to secure a ppa help us find this path we also ask that you live up to the doctrine of trust responsibility in assisting us to help ourselves in building our economy direct the department of energy to assist the bureau of indian affairs to finetune and quicken the process of all economic development ventures on federal indian trust efficiency and energy independence the use of our natural resources will help our people in the tribe to build selfsustainable businesses from renewable energy sources the revenue brought forth will adjust our people's drastic need to upgrade our existing houses into energy efficient homes with renewable energy devices attached and to lessen our dependency on the larger electrical grid along with the employment and businesses for our people thank you for your time i wasn't  able to read the whole testimony because it is quite lengthy as you can tell i was only speaking on one issue but there are so many more that we have mister lankford we will have several questions nature of the indian communities is a longstanding historical relationship the mere fact that there has become a dependency is not our fault it is a fault of a system that is a historical system so the question of the regulatory barriers is relative to what is the federal government's obligation and responsibilities via treaties and statutes and just moral legal responsibilities to the indian communities as governments in our political system we think it is deeply rooted curved back into the constitution but we also feel that we have made great success as the united states government has made a decision termination assimilation are policies that don't work empowerment of tribal governments in our communities and our people in order to advance economic development does work and you have seen in the last twenty five plus years where it is becoming more and more successful you heard in previous testimony different examples and different areas  have the resources so if you look at our political structure as governments do we have the legal political infrastructure that is conducive to the private sector coming onto the indian reservations and conducting business so do they have recourse or do they industryh what is their incentive to come into our reservations and do business my tribe shows you that we can be successful there are other tribes doing the same thing we don't want you to be skewed by the gaming industry that has been quite successful some of the are more break even even though they created jobs but what it has done that you need to understand is that it has created a new kind of resource made available to the tribal government they now can invest into their communities and diversify their economic development portfolio and do things that the federal government can't do so you see areas where tribes are becoming more resourceful and more independent selfgovernance a legislation that is very effective in us negotiating for our fair share the federal system and let us manage it so if you ask yourself how much would it cost us to help you become more independent you don't have enough money you don't have enough money to deal with america's problems today we can't count on you t up to those treaty commitments but if you empower us if you help us become stronger as government we can get the job done and we can show you countless examples where it is working so i am just touching on a few of the issues  chairman this topic is a broad issue there are people out there in the federal system who are trying and they have their own constraints and there are regulatory impediments no question about that that should be removed but the issue is can you count on us have no economic base so we have no revenue base so our revenue base is based on the businesses that we generate so if we're going to become independent from the federal government and become less dependent on it then the rules the laws that recognize that unique stature of tribal corporations and the revenue generated by it and the irs recognition of those that authority is a big deal to us and as well as the authority  that this land is in process is there any system that you know of that is in place out there so the tribes know here is the land going through the process and there are ten that are still interested and twenty that are not in the purchase process what my understanding is is the department has presently a program that addresses fractionation it's been a very small program up until the promise that the cobell settlement has the department for a number of reasons had not put a plan in place until the approval goes through they are thinking about it they are talking internally but they have not done to bia really has a responsibility to help businesses know how to navigate through indian law and dealing with their court systems and unique dynamics of that so businesses will not feel prohibited to be there they will be encouraged to be there and someone can help them navigate through that anywhere out there a process that's in place from bia to say we are going help any business whether it is a mcdonald's or whether it is a company that builds widgets as chairman allen mentioned before that wants to be able to come here so that someone will help them through that process does that kind of program exist ms mittal i am not aware of such a programh such a comprehensive program there might be individual programs for specific parts within bia for example to help them navigate the judicial system and things like that but i'm not aware of a comprehensive program like you just described mister lankford ms kendall are you aware of any type of program like that that would help outside businesses that want to be able to invest in tribes know how to be able to navigate the process ms kendall i am not sir mister lankford that is one we will try to be able to follow up on that  conflict that that creates between the tribal governments and the states so those are the issues that we have seen that in the past that because the tribes have this authority under the three acts they have created conflicts with the states for example states don't like the fact that the tribes are setting standards that are more stringent than the state standard so that's the area we have focused on we haven't done any extensive work looking at the effect it has had on businesses generous the ranking member knows that i generally am afraid to ask questions and then move to another subcommittee so very wise of you gerry but thank you i'll be brief i've got just a couple of questions and they responsive to the information you are sending them ms kendall not always we do get responses primarily on the audit side we request responses from  submit a good subsegment of ones that you feel that you need a response for haven't gotten a response or at least it would be helpful and let us know about them because we probably in most cases want to know as badly as you do and will be able to ask you do you think there is any way that your tribe could navigate through business attempts with the current bia support meaning if you didn't hire your own lawyers at whatever expense you lot of that for them so that's where a lot of the federal functions can be taken over by us that aren't essential federal functions that would make the process move much smoother and much faster mister issa let me do one followup question  funds to maintain that are not developable but they have ancestral significance we go through a long multiyear process to get it in trust and so even when it in the federal government's best interests to deliver it even when the tribe is willing to pay for the future maintenance et cetera et ceterah because i have some welltodo tribesh you can't get the process quickly in concert with the natural resources committee obviously the committee of primary jurisdiction i would ask all of you do you believe that what we should be doing is to come up with greater master plans of the aspirations of tribes commit landintrust designations so that if fee land is acquired at any time it has already gone through the process in a master plan the same way as a city often doesn't have all of its territory filled out but it will those areas of aspiration so that then when they become available through fee or other purposes you could acquire them please chairman mister allen well first of all the answer is yes that most tribes  have a comprehensive land use plan that usually includes their existing reservation and their ceded territory where they resided and it can be a little complicated because in many of our communities it overlaps into our sister tribes so we have to be respectful that our comprehensive plan land plan we want to acquire lands for multiple reasonsh economic development cultural reasons natural resources et cetera that may overlap some areas very clearly is in our territory of the tribe but some will overlap into other territories that our sister tribe will have an interest in and we have to resolve those issues but there are some issues within the process that we have to be may be something identified environmentally or so forth that the united states government says we have a problem until we get that resolved so that i have absolutely no liability this land will not be taken into trust that has been the biggest hiccup in the process greater than their reservation base mister issa my time has expired in the case of california where they lost all of their ancestral tribes they were part of the mission system in most cases and even if they got were often checkerboards where these fell out during the allotment period that's the area we have dealt with a lot where when you buy a piece within your contiguous border you still have to go through an extensive and expensive process to get it in trust  any other comments because my time has expired but if there is anything else the committee should know about expediting that process in order to allow for particularly beneficial use to suggest the reason you were given or the reason you understood that lack of cooperation was they were waiting you out a what kind of cooperation are you getting or not getting how have you communicated to them that that won't be acceptable and waiting you out meaning what you are the acting inspector general and maybe when they get somebody else he or she will be friendlier ms kendall no not at all sir this has been a longstanding problem investigate ourselves or conduct an audit ourselves mister connolly could i just interrupt you one more time just to make sure we all understand what you are saying fiftyhpercent of the allegationsh allegations implies fraud or a crime ms kendall allegations of wrongdoing  one way or the other yes so i can say affirmatively that in the matters that we refer to them to respond to themselves they have been very lacking in getting back to us and being responsive and in fact we have just really in a sense of frustration decided we will close these matters out as nonresponsive and start reporting them to congress in our semiannual report resolution passed by party line vote here in the house five hundred and eighty one dollars thirty cents million reduction for the state and local law enforcement assistance account which tribal courts and detention facilities receive funding from settlement miscellaneous payments account reductions proposed for labor education health and human services serving american indians alaska natives including head start tribal colleges native americans serving nontr economic development it is the community infrastructure to be able to take care of our families and our kids and to educate them and enhance their abilities to care for their needs public safety you want to take about public safety issues you must  congress is wrestling over the deficit reduction but we can tell you when you look at the htrillion budget relative to where we are the indian communities the resourcesh the limited resources is a drop in the bucket and we know they are shaving  every health care category that you measure the health status of our communities and our people from the kids to the elders and so it is a struggle for us we see those programsh hud program go after a whole bunch of programs community programs and economic development programs natural resource enhancement programs et cetera that are out there each one of those programs all make a difference in our communities and we are pushing to become stronger more yes all these cuts in h r h they are highly devastating to our tribes especially to mine historically we programs that need this money we have kids children that depend on a lot of this and that is our future that's what we consider sacred is our children and cuts like this make it so hard make it even harder for us and the hopelessness that i have talked about earlier it just pronounces it more so with these cuts if the government would live up to their trust responsibility give us the hpercent that we need are asking for then we won't be a burden and that would empower us to be just as equal as any other nation within our nation so yeah this will hurt us and it is going to hurt us but we are strong we will survive we survived for hundreds of thousands of years but w staffing in indian detention centers and as a result i believe in part of our two thousand and four report where staffing was one of the multiple concerns congress appropriated  considerable amount of money i think a hpercent increase about sixty two dollars million or so and what our effort was was to go see how they spent that money and unfortunately we could  there is just a multitude of both legal with land issues with relationship issues with cities and with states and with the federal government that we are making job creation incredibly complex and the greatest need that i see on the outside of this and that is why i am asking coming in is not necessarily additional dollars it is the capacity for jobs to grow on their own and to be as you mentioned before chairman allen selfsustaining and not be dependent but to be a wind farm to try to figure out the process of how to get that up so it can be sold and so that jobs can exist there or whether that be a functioning business that is high tech low tech manufacturing whatever may be we have got to figure out the systems and the processes that need to be in place affairs our agency there i am not sure how much they employ or how many of the employees are native american  with the arts and crafts and the resources that we do have and the talents that they do have to try to get some type of business off the ground yet still it and say this one has got to be resolved first could you identify one to say this is the key that has got to be resolved first from the federal government side to make sure that we are pulling back any impediment to job gro will go first i think the landintrust issue has to be resolved because until the tribes have a secure land base they cannot undertake the type of activities that the two tribal members have talked about they  cannot conduct grazing they cannot conduct forestry they cannot conduct business or gaming activities they need to have a secure land base and until this uncertainty that the carcieri decision has created is resolved what we are concerned about is that more and more tribes are going to come so that could be resolved either in the courts or by congress mister lankford well the courts are down the streets so we will have to resolve it with legislative solutions here so i appreciate your testimony and your time and other folks that are here and would be very pleased to be able to receive if you have additional comments and thoughts that you may have that you want to be able