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22–135 PDF 2016

S. HRG. 114–383 

ACCESSING USDA RURAL DEVELOPMENT 

PROGRAMS IN NATIVE COMMUNITIES 

HEARING 

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

JUNE 22, 2016 

Printed for the use of the Committee on Indian Affairs 

( 

(II) 

COMMITTEE ON INDIAN AFFAIRS 

JOHN BARRASSO, Wyoming, Chairman 

JON TESTER, Montana, Vice Chairman 

JOHN MCCAIN, Arizona 

LISA MURKOWSKI, Alaska 

JOHN HOEVEN, North Dakota 

JAMES LANKFORD, Oklahoma 

STEVE DAINES, Montana 

MIKE CRAPO, Idaho 

JERRY MORAN, Kansas 

MARIA CANTWELL, Washington 

TOM UDALL, New Mexico 

AL FRANKEN, Minnesota 

BRIAN SCHATZ, Hawaii 

HEIDI HEITKAMP, North Dakota 

T. MICHAEL ANDREWS, Majority Staff Director and Chief Counsel 

ANTHONY WALTERS, Minority Staff Director and Chief Counsel 

(III) 

C O N T E N T S 

Page 

Hearing held on June 22, 2016 ............................................................................... 1 

Statement of Senator Barrasso ............................................................................... 1 

Statement of Senator Franken ............................................................................... 24 

Statement of Senator Heitkamp ............................................................................. 21 

Statement of Senator Hoeven ................................................................................. 26 

Statement of Senator Moran .................................................................................. 4 

Statement of Senator Murkowski ........................................................................... 3 

Statement of Senator Tester ................................................................................... 2 

WITNESSES

Haugen, Lafe, Executive Director, Northern Cheyenne Tribal Housing Authority ................................................................................................................... 9 

Prepared statement .......................................................................................... 11 

Salerno, Lillian, Deputy Under Secretary, Rural Development Mission Area, 

U.S. Department of Agriculture .......................................................................... 4 

Prepared statement .......................................................................................... 6 

Schuerch, Timothy, President/CEO, Maniilaq Association .................................. 13 

Prepared statement .......................................................................................... 15 

APPENDIX

Fiddler, Tanya, Executive Director, Native CDFI Network, prepared statement ...................................................................................................................... 31 

Response to written questions submitted by Hon. John McCain to Lillian 

Salerno .................................................................................................................. 33 

(1) 

ACCESSING USDA RURAL DEVELOPMENT 

PROGRAMS IN NATIVE COMMUNITIES 

WEDNESDAY, JUNE 22, 2016 

U.S. SENATE, COMMITTEE ON INDIAN AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 2:45 p.m. in room 

628, Dirksen Senate Office Building, Hon. John Barrasso, 

Chairman of the Committee, presiding. 

OPENING STATEMENT OF HON. JOHN BARRASSO, 

U.S. SENATOR FROM WYOMING 

The CHAIRMAN. Good afternoon. I call this hearing to order. 

Today, the Committee will hold an oversight hearing on Accessing USDA Rural Development Programs in Native Communities. 

More than 88 programs administered by 16 different Federal agencies target rural economic development in the United States. The 

USDA administers the greatest number of rural development programs and has the highest average of program funds going directly 

to rural counties. 

According to the USDA’s own Agriculture Census in 2012 just 

over 72,000 farms and ranches are owned and operated by Native 

Americans. The same USDA census found that among minority 

communities Native Americans operate the second highest number 

of farms and ranches, with the highest concentration being in the 

southwest United States, and the States of Oklahoma and North 

Carolina. 

In my own home State of Wyoming, tribal members work alongside their neighbors, growing and producing many of the agricultural products that feed American families every day. Again, according to the USDA Agriculture Census, American Indian and 

Alaska Native-owned farms account for approximately $3.3 billion 

of market value for the products they sell, yet many tribes are located in the some of the poorest rural communities in the United 

States. 

Approximately 30 percent of American Indians and Alaska Natives live in rural communities and nearly 40 percent of rural tribal 

jobs are dependent on agriculture. Despite these numbers, the 

Committee continues to hear that tribes lack access to USDA rural 

development programs, and many times as they say ‘‘the proof is 

in the numbers.’’ 

As an example, in her most recent written testimony before the 

Senate Committee on Agriculture, Nutrition, and Forestry SubVerDate Mar 15 2010 13:28 Oct 18, 2016 Jkt 022135 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\DOCS\22135.TXT JACK
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committee on Rural Development and Energy, Lisa Mensah, Undersecretary for Rural Development at the USDA, stated that, 

‘‘Since 2009, USDA Rural Development has helped more than 1.1 

million rural families buy, refinance and maintain homes with 

$137.5 billion in Rural Housing Service investments.’’ 

However, only $1.3 billion from that period went to providing 

rural housing in tribal areas. That is just less than 1 percent of the 

Rural Housing Service investments going towards Native communities. 

The comment we hear from tribes regarding Rural Development 

is that when a tribe identifies the right program to address their 

need, the process is a bureaucratic nightmare. Despite its $212 billion dollar loan portfolio, USDA has only invested, $3.1 billion dollars with tribes. 

With so many tribes located in rural areas, it is important for 

this Committee to understand how USDA Rural Development is 

working to conduct outreach with tribes, not only in the agricultural area, but also in rural business development, housing, and 

utility services. 

I am particularly interested in hearing from USDA on how they 

can better market and provide outreach their programs and opportunities to tribal communities. Why aren’t tribes accessing these resources? What are the barriers and how can Congress and others 

assist? 

Before we hear from the witnesses, I would like to turn to Senator Tester for his opening comments. 

STATEMENT OF HON. JON TESTER, 

U.S. SENATOR FROM MONTANA 

Senator TESTER. Thank you, Mr. Chairman, for holding this 

hearing today to discuss the wide range of programs the USDA 

manages and how to ensure the tribal communities can better access these programs. 

I also want to thank the panels for being here today. I look forward to your testimony. 

The testimony received by the witnesses seems to paint a different picture than the one the USDA has submitted. The USDA 

talks about a large amount of work it is accomplishing in the Country over recent years which may, in fact, be true. I want to commend them for the work they have done and continue to do for tribal communities. 

On the other hand, we have testimony from the witnesses that 

paints a different story. Oftentimes, we hear from tribes they are 

not sure what programs are available through the USDA or that 

they had a bad experience in the past, so they just say the heck 

with it and no longer bother to access those programs. Both may, 

in fact, be correct. 

Hopefully, today we can learn if there is really a disconnect and 

discuss solutions for moving forward. It is obvious that tribal communities have figured it out. The ones that have figured it out 

greatly benefit from a variety of USDA programs whether it is 

rural housing, broadband connectivity or other infrastructure 

needs. 

3 

However, I do think we can do more to make sure that all tribes 

are able to access these programs. Many tribal communities are 

rural, have high levels of poverty which are exactly the kinds of 

communities USDA programs can have the biggest impact on and 

are designed to help. 

Today, I hope to hear some ideas on how we can improve communication between the agency and tribes. I know many of the USDA 

programs are not specifically geared to Indian Country, so maybe 

increased training for agency staff on working with the tribes 

would be helpful and vice versa. 

I do not know the right answer, but I do believe this hearing is 

an important step to re-engage on issues of critical importance to 

Indian Country. 

I want to thank the witnesses for coming to testify. Our two tribal witnesses have come a long way to be here. I specifically want 

to thank Lafe Haugen for continuing to serve the Northern Cheyenne and Indian Country in general. 

Lafe, you have been working on housing issues for so long that 

we are going to change your last name to Lafe Housing. He is a 

great asset to Indian Country, not only in Montana, but across the 

Country. I really appreciate the work and the openness he has had 

with my office. 

I appreciate your willingness to share your ideas. I look forward 

to finding solutions to making these USDA programs better. 

On a side note, I have to hop out of here to go to yet another 

hearing but I will be reading the transcript of this hearing and will 

be looking for solutions. 

Thank you, very, very much. 

The CHAIRMAN. Thank you, Senator Tester. 

Senator Murkowski, I know you would like to introduce one of 

our witnesses. 

STATEMENT OF HON. LISA MURKOWSKI, 

U.S. SENATOR FROM ALASKA 

Senator MURKOWSKI. Thank you, Mr. Chairman. 

I want to thank you for having this hearing. I guess the last time 

we actually had a review on this subject was back in 2009. There 

has been a lot that has changed in the State of Alaska in that period of time with regard to USDA and Rural Development, specifically in western Alaska. 

We have had three rural offices close in the communities of 

Nome, Dillingham and Bethel. These are all very remote; you cannot access them by road. They are unique in the sense of the very, 

very high cost in terms of services, utilities, fuel and goods. 

As we look at the challenges in accessing telecom or housing 

stock, unemployment, creating economic opportunities and jobs is 

why we look to USDA for some assistance. Tim Schuerch is in a 

unique position to speak to that today as the President and CEO 

of Maniilaq Association based out of Kotzebue. 

I think Tim will not only be able to speak to some of the challenges in the region as it relates to climate, infrastructure, energy, 

and economic development. These are all areas under the scope of 

USDA Rural Development programming and the funding that is 

vital to our State. 

4 

There have been some cooperative agreements with some potential here. I think we will have an opportunity to hear about that. 

Tim, you have come a long way to be here with the Committee 

this afternoon. Know that I greatly appreciate not only your willingness to travel and speak before the Committee and put these 

issues on the record, but your leadership within Maniilaq and within the State. Welcome to the Committee. 

The CHAIRMAN. Thank you very much, Senator Murkowski. 

Would other Senators like to make an opening statement? Senator Moran. 

STATEMENT OF HON. JERRY MORAN, 

U.S. SENATOR FROM KANSAS 

Senator MORAN. Thank you, Mr. Chairman. 

I would just point out that I am here serving in my capacity as 

a member of this Committee but there are four or five of us on this 

Committee who are members of the Agriculture Appropriations 

Subcommittee. 

They are Senator Hoeven, Senator Daines, Senator Tester and 

we are very interested in hearing what USDA and our witnesses 

have to say so that we can work in that regard to make sure that 

we have a desirable outcome. 

I thank you, Mr. Chairman, for hosting this hearing. 

The CHAIRMAN. Thank you very much, Senator Moran. 

In a few seconds, I will invite the witnesses to begin. I would like 

to remind each of you that your full written testimony will be made 

a part of the official hearing record. Please keep your statements 

to five minutes so that we have plenty of time for questions. I look 

forward to the testimony. 

Two of the guests have been introduced but the third who has 

not yet been introduced is Ms. Lillian Salerno, Deputy Under Secretary for the Rural Development Mission Area, U.S. Department 

of Agriculture, Washington, DC. 

Ms. Salerno. 

STATEMENT OF LILLIAN SALERNO, DEPUTY UNDER 

SECRETARY, RURAL DEVELOPMENT MISSION AREA, U.S. 

DEPARTMENT OF AGRICULTURE 

Ms. SALERNO. Chairman Barrasso, Ranking Member Tester, Senator Moran, and members of the Committee, thank you for the opportunity to be here this afternoon to discuss the Department of 

Agriculture’s Rural Development Mission Area and how Native 

communities access our programs. 

Rural Development, RD, as we are known in our community, 

manages a loan portfolio of more than $212 billion organized into 

three agencies: the Rural Utilities Service, Rural Businesses and 

Cooperative Service, and Rural Housing and Communities Facilities Program. 

Our fundamental mission is to increase economic opportunity 

and improve the quality of life for all rural citizens. We are committed to working tirelessly to fully utilize the enormous potential 

and opportunity our funds provide and nowhere is RD’s assistance 

more vital than in America’s Native communities. 

5 

In order to achieve the maximum impact of our Federal resources, we believe place-based approaches are the best tool. Why? 

First, it is important to acknowledge, and we do, that tribal leaders 

know what is best for their communities. 

They know the conditions they want to change, the strategies it 

will take to get them there and the approach that will be responsive to the needs of their people. This requires respect for tribal 

sovereignty and self determination, including empowering Native 

families to make informed decisions. 

Individual, child and family support is fundamental to economic 

development. The nutritional, health care, child care and essential 

support needed to be available and accessible for work force development to occur and before investment will invest. This has resulted in the need and privilege to engage tribes with Federal 

agencies to think concurrently and holistically about implementation and capacity building. 

Second, tribal leaders and their citizens support what they help 

create. When tribal leaders are engaged and take ownership of 

their development goals, our joint efforts are much more successful. 

Federal agencies working with tribes have acknowledged this from 

the beginning. We know this is a partnership with tribes and not 

Federal programs for tribes. 

Finally, people respond better when they know where they are 

headed and there is a road map. We have learned throughout this 

process of the interconnectedness of place in Indian Country, combined with geographic isolation, lack of access to capital and other 

systemic issues make linear planning and implementation difficult 

and often impractical. Constant evaluation, feedback loops, adjusting and moving forward takes time but the results in terms of mutual trust, confidence in one another and the process and a commitment to stay in it for the long haul is producing results. 

This Administration and Secretary Vilsack place a high priority 

on improving program delivery to Native communities. In addition 

to our tribal promise zone designees, tribal areas throughout the 

Country are benefitting from RD programs, housing, utilities and 

business creation. 

Since 2009, total RD investments benefitting American Indians 

and Alaska Natives have exceeded $3.1 billion. Congress has provided RD with special tools to help drive investments to tribal 

members and throughout tribal areas. There are legislative mandates for tribal projects and programs that spur job growth, build 

water and wastewater projects and assist tribes, universities and 

community facilities receive funding. 

In the Water and Environmental Grant Program, this legislative 

mandate has funded nearly 600 projects totaling $544 million in 

loan and grant assistance since 2009. These efforts ensure Native 

communities have access to safe and clean drinking water. 

In this same time frame, RD has invested $159 million through 

business creation programs to create economic opportunities. This 

includes over $12 million invested in revolving loan funds to Native 

community development financial institutions. The legislative mandates allow RD to direct funds to the Native communities but financing projects that benefit American Indians and Alaska Natives 

6 

are not dependent on or limited by the special tools Congress has 

provided. 

For example, in the year 2015, there was a total of $49.9 million 

legislatively mandated to benefit tribal projects. In this same fiscal 

year, RD invested over $487 million for projects that directly impacted these communities, providing nearly 90 percent of RD’s investments through our regular programs. 

Native communities also benefit from RD’s field-based delivery 

structure. We have nearly 4,000 staff directly engaged with local 

lenders and community partners to solve problems and explore options for economic development. Additionally, RD State offices 

maintain Native American tribal coordinators to assist tribes. 

Thank you for your continued interest and support of RD programs and how tribal communities can access our programs. Together, we continue to make key investments in the future of tribal 

Nations. 

I appreciate the opportunity to testify before the Committee. I 

am happy to answer any of your questions. 

[The prepared statement of Ms. Salerno follows:] 

PREPARED STATEMENT OF LILLIAN SALERNO, DEPUTY UNDER SECRETARY, RURAL

DEVELOPMENT MISSION AREA, U.S. DEPARTMENT OF AGRICULTURE

Chairman Barrasso, Vice Chairman Tester and Members of the Committee, I appreciate this opportunity to discuss how Native communities access the Department 

of Agriculture’s Rural Development (RD) Programs. 

Rural Development’s fundamental mission is to increase economic opportunity 

and improve the quality of life for all rural citizens. RD manages a loan portfolio 

of more than $212 billion organized into three agencies: the Rural Utilities Service 

(RUS), Rural Businesses and Cooperative Service (RBS), and Rural Housing Service 

(RHS). RD investments support rural residents looking for affordable, safe housing; 

municipalities seeking water, electric and telecommunications infrastructure and 

community facilities; and small rural businesses, coops, and agricultural producers 

looking to expand into new markets. Together, RD agencies work to help communities build stronger economies, create jobs, and improve the quality of life in rural 

areas. 

Nowhere is this RD assistance more vital than in America’s Native communities. 

RD is fully committed to building on past investments and improving our ongoing 

support of American Indians and Alaska Natives. Secretary Vilsack and Rural Development Under Secretary Mensah place a high priority on improving program delivery to Native communities, and our programs are designed for communities with 

the greatest need. 

This Committee is well aware that the overlap is all too common among areas 

that are persistently poor, areas that are extremely remote and areas that are home 

to American Indians and Alaska Natives. I have seen firsthand, the ongoing economic distress, housing challenges and lack of infrastructure throughout Indian 

Country. Many RD programs are expressly designed to help alleviate the challenges 

faced in the most remote corners and persistently poor communities across the 

United States. 

RD agencies have a long history of investing in tribal economies. Since 2009, total 

RD investments benefitting American Indians and Alaska Natives have exceeded 

$3.1 billion. Thanks to your work, Congress has provided RD special tools to help 

drive investments to Tribal members and throughout Tribal areas. This includes 

funds that are legislatively mandated in RD’s programs each year to assist Tribes, 

Tribal members and Tribal Colleges. It also includes the RUS Substantially Underserved Trust Areas (or SUTA) provisions. The SUTA provisions provide additional 

flexibilities in many of our utilities programs to help increase investments in trust 

areas that are substantially underserved. 

Historically, RD has had funds legislatively mandated for Tribal projects in the 

following programs: 

• The Community Facilities program through the Tribal College and University 

Grant Initiative 

7 

• The Rural Business Development Grant program 

• The Intermediary Relending program, and, 

• The Water and Environmental Grant program, which includes funding for the 

Rural Alaska Village Grant program 

Since 2009, RUS has funded 591 Water and Environmental Grant program (WEP) projects totaling $544 million in loan and grant assistance to Native Americans. One 

example is the South Delaware County Regional Water Authority in Oklahoma, 

which received $9.65 million. This project funds a new regional water authority providing 1,140 Native American homes throughout the Cherokee Nation in Adair, 

Cherokee, and Delaware counties with wholesale water. 

In Fiscal Year 2015, WEP also provided more than $1.3 million in technical assistance to provide targeted technical assistance to Native American Tribes including the Inter-Tribal Council of Arizona, the Tanana Chiefs Conference in Alaska, 

the United South and Eastern Tribes, the Painted Desert Demonstration Projects, 

Inc., the Rural Community Access Partnership (RCAP) and the Native American 

Water Association. Additionally, WEP, in collaboration with the Environmental Protection Agency (EPA), conducts several workshops a year to educate rural and tribal 

system operators on asset management planning, water and energy efficiency practices and other sustainability management practices. Since 2009, RBS has invested $159 million through its programs to help create more economic opportunity for Tribes and Tribal members. Specifically, over $12 

million has been invested in revolving loan fund capital to Native Community Development Financial Institutions (CDFIs), Tribes and other entities. These organizations provide low interest loans to help support Native owned businesses and native 

entrepreneurs. Over this same time, RD has provided additional funding for intermediaries to provide technical assistance, training, and other services to their customers working to create new jobs. 

Rural Development funding to American Indians and Alaska Natives is not dependent on, nor limited by, the special tools that Congress has authorized. For instance, in FY 2015, a total of $49.9 million was legislatively mandated to benefit 

tribal projects. During this same period, RD invested over $487 million for projects 

that directly impacted American Indians and Alaska Natives—which equates to 

nearly 90 percent of RD’s investments benefitting native communities provided 

through our regular programs. Just last year, RD announced a Community Facilities loan for $164 million to the 

Yukon-Kushkowin Health Corporation, the only full-service health care facility in an 

area almost the size of Oregon. This loan is four times larger than previous direct 

loans awarded through the program and was used to provide permanent financing 

for a new 129,600-square-foot primary care clinic, a 110,000-square-foot hospital remodel, and additional housing for clinic staff in Bethel, Alaska. 

This Committee heard from RUS Administrator McBride in April on investments 

made in telecommunications projects serving Tribal Lands, Tribal Organizations, 

American Indians, and Alaska Natives totaling over $157 million since 2009. Telecommunications infrastructure loan programs ensure rural areas have access to reliable and affordable telecommunications systems. Since 1995, RUS has provided 

loans and grants to eight of the nation’s ten tribally-owned regulated telecommunication carriers. RUS has also focused on connecting native and rural communities 

to broadband. The Community Connect grant program awards grants to communities with no access to broadband service and since 2009 this program has provided 

nearly $14 million to assist tribal communities. 

Native communities also benefit from RD’s field based delivery structure—where 

nearly 5,000 staff, who live and work in every state, make and service loans and 

grants throughout Indian Country and Alaska. Additionally, RD state offices designate Native American Coordinators to assist tribes by providing technical assistance and programmatic knowledge and acting as a single point of contact for Tribes 

in their respective jurisdictions. These local partnerships help bring new projects to 

life. 

Rural Development is not making investments in a vacuum. Our staff and programs play a critical role in helping Tribes leverage core funding from other Federal 

agencies and funding sources. Each investment is the culmination of the combined 

efforts of Tribes themselves, RD staff and other Federal and non-profit partners. 

Each and every dollar that a Tribe or Tribal member accesses from a USDA program, takes pressure off those thinly stretched funding streams and allows Tribes 

to accomplish additional work and achieve additional successes. 

Rural Development is engaged in a number of interagency collaborative efforts including the Indian Country Infrastructure Interagency Task Force alongside the Department of Housing and Urban Development (HUD), Indian Health Services (IHS), 

8 

the Environmental Protection Agency (EPA) and the Department of the Interior; a 

working group on Native American Homelessness spearheaded by the United States 

Interagency Council on Homelessness; a working group headed up by HUD focused 

on streamlining the environmental review process for Indian housing projects; and 

a more focused approach on training alongside of the Federal Communication Commission (FCC) on Tribal broadband and telecommunication opportunities. 

As RUS Administrator McBride testified to this Committee in April 2016, USDA 

and FCC are working closely to coordinate outreach efforts. At the end of May, the 

FCC hosted a Tribal Broadband, Telecom, and Broadcast Training and Consultation 

Workshop in Great Falls, Montana. RD staff participated throughout the workshop 

and provided information about RUS and its programs spanning four distinct sessions. Topics covered included the Community Connect Grant Program, the Distance 

Learning and Telemedicine Grant Program and the SUTA provisions and related 

loan programs. RUS staff will participate in additional workshops hosted by the 

FCC throughout the remainder of the fiscal year in Seattle, the upper Midwest and 

the Southwest including Oklahoma. 

In the area of rural housing, just last week RD field staff from around the country 

received training to improve the delivery of RD’s homeownership programs on Tribal 

trust land. RD has delivered homeownership loans on Tribal trust lands for some 

time now, but it remains an ongoing and significant challenge. Since FY 2000 10 

percent of RD direct homeownership loans to Native Americans have been on Tribal 

trust land, which we believe we can improve. 

The training focused on building partnerships with Tribes, with Tribally Designated Housing Entities and with other federal partners invested in the process, 

to increase homeownership opportunities throughout Indian Country and Alaska. In 

addition to the RD trainers and participants, sessions during the training were provided by Bureau of Indian Affairs (BIA) staff regarding the Housing Improvement 

Program (HIP), the land leasing process and the Helping Expedite and Advance Responsible Tribal Home Ownership (HEARTH) Act of 2012. HUD staff provided information regarding its 184 Loan Guarantee program, the Indian Housing Block Grant 

program and the Indian Community Development Block Grant program. Veterans 

Affairs staff also attended and provided information regarding its homeownership 

programs for Native American Veterans. And finally, staff from the Consumer Financial Protection Bureau (CFPB) attended and contributed to the discussions. 

These two days of training, coordination, and education served as an important 

first step in how RD can focus on this challenge. We remain committed to working 

on strategies to provide additional homeownership opportunities on Tribal trust 

land. We will continue to collaborate with Tribes, the Tribal housing industry, BIA, 

HUD, and the VA whenever appropriate and possible. 

Another significant way RD has been working to improve the impact of its investments in Native Communities is through collaborative, place based efforts like the 

StrikeForce and Promise Zone initiatives. The Promise Zone designation partners 

the Federal Government with local leaders who are addressing multiple community 

revitalization challenges in a collaborative way and have demonstrated a commitment to results. In the first two rounds of the Promise Zone initiative two tribal 

Promise Zones were designated: the Choctaw Nation of Oklahoma and the Pine 

Ridge Indian Reservation of the Oglala Sioux Tribe in South Dakota. Earlier this 

month two additional tribal Promise Zones were designated: the Spokane Tribe of 

Indians in Washington and the Turtle Mountain Band of Chippewa Indians in 

North Dakota. 

These Tribal Promise Zones were selected through a transparent application process that demonstrated the strength and effectiveness of their local partners’ commitments. Each Promise Zone Designee receives: 

• The opportunity to engage five AmeriCorps VISTA members in the Promise 

Zone’s work, 

• A federal liaison assigned to help designees navigate federal programs, and, 

• Preferences for certain competitive federal grant programs and technical assistance from participating federal agencies. 

The first two tribal Promise Zones have achieved some significant accomplishments to date. For instance the Choctaw Nation of Oklahoma leveraged its designation to secure a $21 million New Markets Tax Credit investment to build an environmentally sustainable steel manufacturing facility in the Promise Zone. The mill 

will support approximately 300 new jobs in the region. At the same time, the lead 

applicant of the Promise Zone at Pine Ridge, Thunder Valley Community Development Corporation, is well on its way to building a sustainable, regenerative housing 

community on the Reservation. With the announcement of two additional Tribal 

9 

Promise Zones, we are looking forward to doubling down on these efforts to invest 

strategically and collaboratively build brighter futures for American Indians and 

Alaska Natives. 

Thank you for your interest in USDA Rural Development and thank you for your 

support of our agency and its mission. Together, we can coordinate and leverage our 

resources to invest in the future of this country’s Native communities. I appreciate 

the opportunity to testify before you today. I am happy to answer any questions that 

you might have. 

The CHAIRMAN. Thank you very much for your testimony, Ms. 

Salerno. We appreciate having you here today. 

Mr. Haugen. 

STATEMENT OF LAFE HAUGEN, EXECUTIVE DIRECTOR, 

NORTHERN CHEYENNE TRIBAL HOUSING AUTHORITY 

Mr. HAUGEN. Good afternoon, Chairman Barrasso, Vice Chairman Tester, and members of the Senate Committee on Indian Affairs. 

My name is Lafe Haugen. I am an enrolled member of the Northern Cheyenne Tribe located in the great State of Montana. I am 

also the Executive Director for the Northern Cheyenne Housing 

Authority. I am currently serving my 24th year in this program. I 

am both honored and humbled to sit here before you today to give 

testimony on USDA Rural Development in Indian housing. 

First, I would like to start by talking about the Native American 

Housing Assistance Self Determination Act, NAHASDA. I realize 

this is a hearing on USDA, but without funding from NAHASDA, 

tribes will not have the necessary resources to be able to leverage 

with entities such as the USDA. 

NAHASDA was to be reauthorized by the end of 2015 but it did 

not receive the necessary votes. Without congressional authority, it 

is vulnerable to cuts in funding or possible elimination. I respectfully urge Congress to reauthorize this valuable source of funding 

in the coming months so that we can ensure continued housing for 

all Native Americans. 

Since NAHASDA was passed in 1996, USDA has promised to deliver program funds to Indian tribes and organizations, yet this has 

not materialized. Every program they promote, including the ten 

housing programs in the State of Montana, has an application in 

Indian Country, yet tribes only receive a fraction of the funding 

they are eligible for. 

This problem primarily is related to the restricted lands, including land in trust. From 1993 until 2004, USDA made a tremendous 

effort to set goals to improve its presence in Indian Country. In 

fact, they developed the Native Lending Guide accordingly. 

By and large this effort failed, especially on tribal lands. Yet, 

Rural Housing Services continues to try and address this weakness 

with still no viable solutions or answers, in my opinion. 

Over the last year, USDA Housing Administrator, Tony Hernandez, along with his tribal Coordinators, Ted Beulow and Lynn 

Trujillo, have been working with tribal coalitions and housing associations in Montana and South Dakota to help develop solutions to 

the significant barriers to trust land applications of USDA housing 

resources. I personally applaud their efforts for taking this significant step. 

10 

Back at home, Bruce Jones and John Walsh, State Directors 

from South Dakota and Montana, are attempting to produce Memorandums of Understanding with their respective tribes that would 

demonstrate how these valuable programs might be delivered with 

more authority and oversight at the tribal level regarding loan 

origination and if necessary, loan mitigation. I would ask the Committee to encourage the USDA to offer maximum flexibility to these 

States to complete the MOU’s. 

Unfortunately, numbers speak for themselves. Between 2000 and 

2015, USDA provided 3,420 Section 502 loans to Native Americans 

across the Country. That is about 228 loans per year. 

The USDA-sponsored 515 multi-family rental projects have become even scarcer. In fact, not one single 515 project was financed 

on trust lands over the last four years, with only one being approved in the last six years. This is unacceptable if we plan on 

making inroads with the homeless. Recent NAIHC data shows an 

unmet need in Indian Country of over 200,000 houses and that 

number is growing. 

Of the ten housing programs being offered by State USDA offices, Montana tribes only qualify for the 504 grant which is focused on minimal home repair for the elderly. The rest of the housing programs require extensive documentation ranging from the 

cumbersome environmental process to the issue of foreclosure. The 

State office has issues with taking these items to tribal courts. 

With HUD, we have already worked out all of these issues. We 

feel the State office could follow suit with their housing programs. 

A solution would be to bring back the position of the State USDA 

Native American Coordinator. 

My tribe is fortunate enough to have both capacity and perseverance when it comes to dealing with the USDA. We have trudged 

through the cumbersome application process and have successfully 

utilized several grants including the Rural Utility Service Loan, a 

grant used to build the much-needed water system in the community of Muddy Cluster; the Rural Energy for America Program 

Grant to Chief Dull Knife College and the Lame Deer Boys and 

Girls Club in assisting them with funds for energy efficiency purposes; a solid waste grant which provided for the purchase of new 

equipment for the solid waste transfer station; and the Real Business Enterprise Grant which my program received which is being 

used to build a 5,000 square foot business center in downtown 

Lame Deer. The Northern Cheyenne Tribe is very grateful for all 

of this assistance. 

The tribes in Montana make up about 15 percent of the population served by USDA. I believe a State set-aside of funds that reflect this number would be a solution. Tribes would still have to 

submit applications and meet all the requirements but this would 

give them yet another opportunity to solve their housing problems. 

I believe the pressure of requesting more funding from HUD 

could be lessened with another Federal entity coming to the aid of 

the tribes. 

Both Federal programs target the low income populace of rural 

America. Indian tribes, for the most part, reside in rural America 

and the poverty in Indian Country is well documented. It is our 

hope and intent that this hearing will lead to proposed changes 

11 

that could be included in the coming year’s Farm Bill that would 

call for regulatory changes and make any USDA programs more accessible and usable for all tribes. 

Thank you for allowing me to speak, Mr. Chairman. 

[The prepared statement of Mr. Haugen follows:] 

PREPARED STATEMENT OF LAFE HAUGEN, EXECUTIVE DIRECTOR, NORTHERN

CHEYENNE TRIBAL HOUSING AUTHORITY

NAHASDA Reauthorization 

The NORTHERN CHEYENNE TRIBE, and other Tribes across the country, had 

high hopes when the Native American Housing Assistance and Self-Determination 

Act of 1996 (NAHASDA) (P.L. 104–330) was enacted. With its emphasis on self-determination, this new Act gave the Northern Cheyenne Tribe, through its TriballyDesignated Housing Entity (TDHE), the authority to put its housing funds to work 

in ways that best served our tribal community. 

I know that this Hearing was set to discuss Tribal access to USDA Housing resources, but the point that I want to make is that without the reauthorization of 

NAHASDA, Tribes will not have the resources to pursue other resources including 

USDA. One of the primary purposes of NAHASDA was to provide funds for Tribes 

to leverage with other Federal and Public resources to address their unmet housing 

needs. 

Congress was required to reauthorize NAHASDA by 12/31/2015 after passing a 

continuing resolution in 2013. This program is currently without Congressional authority and is vulnerable to cuts or elimination until a bill is passed. It seems that 

many Congressman and Hill committee staff are unaware that NAHASDA is the 

only HUD funding available to Native American Tribes since they gave up access 

to the HUD 1937 ACT Public Housing Program in exchange for an annual block 

grant. While funding has not increased in over 20-years, reduction or elimination 

would devastate Tribal housing programs for hundreds of Native Americans across 

the nation. Today, $650 million of annual funding is at risk! 

USDA Separate Title 

Since NAHASDA was passed in 1996, USDA has promised to deliver program 

funds to Indian Tribes and organizations, yet it has not materialized. Every program they promote has an application in Indian Country, yet rural Tribes only receive a fraction of the funding that they are eligible for. This problem is primarily 

related to restricted lands including Tribal Trust. From 1993 until 2004, USDA 

made a tremendous effort to set goals to improve its presence in Indian Country. 

In fact, they developed a ‘‘Native Lending Guide’’ accordingly. By and large, the effort failed, especially on Tribal lands. Yet, Rural Housing Services continues to try 

and address this weakness with no answers. 

Recently, the USDA Housing Administrator Tony Hernandez along with his Tribal Coordinators; Ted Beulow and Lynn Trujillo have been feverishly working with 

Tribal Coalitions and Associations in Montana and South Dakota to help develop 

solutions to the significant barriers to Trust land applications of USDA housing resources. Two weeks ago, USDA hosted a meeting right here in Washington DC with 

their staff and other Federal Agencies to further explore solutions. I personally applaud their efforts for taking this significant step. 

A problem that exists in Indian Country is building Capacity at the Tribal level. 

Unfortunately, many rural Tribes still lack Capacity and lending infrastructure. The 

Housing Associations, Coalitions and Housing Professionals in our region continually work on informing and educating Tribes and their members on the value of 

individual home loans. Many Native Americans are not familiar with the concept 

of home mortgaging as there were not exposed to this in the pre-HUD era when 

only Tribal homes were available. 

There exists a need for additional funding for Education and Technical Assistance 

to be able to provide Tribes with Financial Literacy and Homebuyer Training to be 

able to move forward with the rest of America. With this information, Tribes will 

be better able to develop the concept of Homeownership and building Wealth in 

their homes. We feel that the Northern Plains region is the perfect area to continue 

to develop this concept as they have the most Trust land and the greatest need. 

In the past, both Neighborworks and the Rural Community Assistance Corporation (RCAC) have provided funding in this area. I believe that their funding originates with USDA. There are some cases where these entities went to Tribes to provide Technical Assistance and Homebuyer Training, but unfortunately, they ended 

12 

up being educated. We believe that the organizations in our region like the Montana/Wyoming Housing Coalition and South Dakota Homeownership Coalition 

should receive this funding as they are specifically geared towards working with and 

educating Tribes in these areas. 

Currently, Bruce Jones and John Walsh, State Directors from South Dakota and 

Montana are attempting to produce Memorandums of Understanding with their respective Tribes that would demonstrate how valuable these programs might be delivered with more authority and oversight at the Tribal level regarding loan origination and if necessary, loan mitigation. I would ask the committee to encourage the 

USDA to offer maximum flexibility to these States to complete the MOU’s with the 

hope that a successful process of a loan production can begin on restricted lands. 

Please consider these statistics: between 2000 and 2015, USDA provided 3420 

Section 502 loans to Native Americans across the Country. That is about 228 loans 

per year. 10 percent or about 20 loans a year, are financed with the 502 program 

on restricted land. Recent National American Indian Housing Council (NAIHC) 

shows an unmet need in Indian Country of over 200,000 houses and growing. USDA 

sponsored 515 Multi-family Rental projects have become even more scarce. In fact, 

not one single 515 project was financed on Trust lands over the last 4-years with 

only one (1) being approved in the last 6-years! This isn’t acceptable. 

Northern Cheyenne 

The Northern Cheyenne Tribal Housing Authority, TDHE for the Northern Cheyenne Tribe, has been working hard for many years to utilize a variety of funding 

sources to fund its housing activities, including non-NAHASDA grants, low-income 

housing tax credits, and HUD loan guarantees. However, we have our sights set on 

utilizing funding from USDA. In the last few years, we have stepped up our efforts 

to make progress in making USDA funding more tribal-friendly with several meetings in Bozeman and throughout the State. Unfortunately, significant barriers still 

exist at the state level where the funding is distributed. In spite of initially responding to Commission initiatives and establishing Native American outreach, few 

USDA offices have met Native American goals established in the late 1990’s. In fact, 

the State office in Montana has phased out their Native American Coordinator position in spite of little success in matching USDA Rural Development’s resources with 

huge unmet need on Montana’s Indian Reservations. 

However, the Northern Cheyenne Tribe has trudged through this cumbersome application process and has successfully utilized USDA Rural Utilities Service (RUS) 

loans and grants to build and improve a water system from the town of Lame Deer 

to the town of Muddy Cluster. In addition, USDA has been a good resource to Chief 

Dull Knife College and the Lame Deer Boys and Girls Club in assisting them with 

funds for a variety of purposes. Recently, USDA provided funding for the purchase 

of new Equipment for the Solid Waste Transfer Station which is now in full operation. The Northern Cheyenne Tribe is very grateful for all of this assistance. 

The Northern Cheyenne Tribal Housing Authority, in cooperation with the Northern Cheyenne Tribe, submitted an application for the Rural Business Enterprise 

Grant (RBEG) and we were successful. This all important funding is being used to 

construct a 10-business, 5000–Square foot Business Center in downtown Lame Deer 

which will entice and stimulate Economic Development at the local level. This is a 

much needed building that will attract tourists and customers from all over the 

country and world as they travel highway 212 on their way to the Black Hills. 

However, we desperately need resources that USDA provides in other areas including Water/Sewer improvement, Community facilities as well as the potential 

benefits of the several USDA Rural Housing Services. Whenever Tribal Leaders or 

their housing professionals attend events where information is being presented by 

USDA Rural Development, they inevitably hear how USDA Rural Development Programs can build entire rural communities and cities. 

We hear firsthand about programs that can build housing, roads, water and sewer 

infrastructure, community buildings, provide police and fire vehicles, economic development programs etc., and when we ask for information on how much of these 

USDA Rural Development programs funding has been spent or targeted for the 

seven reservations in Montana, there tends to be silence. 

Proposal 

Tribes believe that effective development in tribal communities depends on cooperative arrangements among the Federal agencies that allow for the ability to combine resources. In fact, it would appear that without such combination of funding 

sources and inter-agency collaboration, Tribes will be unable to offer a full menu 

of housing products to build on the substantial progress made since the enactment 

of NAHASDA. 

13 

A conservative estimate is that about 71⁄2 percent of Montana’s population are 

members of the seven Indian reservations. Considering the fact that only 50 percent 

of Montana’s residents are qualify as rural, and therefore eligible to participate in 

USDA programs, the number of Indians that are eligible jumps to 15 percent. All 

reservations in Montana qualify for USDA programs. We suggest that 15 percent 

of the total allocation of USDA funding for Montana be set aside and reserved for 

the Reservations. 

USDA Rural Development has many programs and resources that are targeted for 

the low income populace of rural America. Indian tribes, for the most part, reside 

in rural America and the poverty in Indian Country is well documented. It is our 

hope and intent that this Hearing would lead to proposed changes that could be included in the coming year’s Farm Bill that would call for regulatory changes that 

would make USDA programs more accessible and usable for tribes. 

We are pleased to see an oversight hearing so that Tribes can request funding 

and support in a more direct manner that recognizes Self-determination. 

The attachment USDS Agencies Serving Montana has been retained in the 

Committee files and can be found at http://www.fsa.usda.gov/Internet/FSA— 

File/mt—usda—directory.pdf 

The CHAIRMAN. Thank you so very much for your testimony. 

Now, we will hear from Mr. Schuerch. 

STATEMENT OF TIMOTHY SCHUERCH, PRESIDENT/CEO, 

MANIILAQ ASSOCIATION 

Mr. SCHUERCH. Thank you, Mr. Chairman and members of the 

Committee. I appreciate the opportunity to come here to share 

some of our experiences. 

We share Mr. Haugen’s desire and concern that some of the programs the USDA has to improve outreach to the tribes need to be 

better supported. We find that is also the case in our part of Indian 

Country. 

As Senator Murkowski alluded, sometimes the outreach is not 

adequate. If I went to one of our tribal councils right now and 

asked, Members of the Noorvik Tribal Council, do you know what 

programs the USDA runs that might benefit your community and 

your tribe, I really do not think they would know what those are. 

I think that would also be the case with every one of the 12 federally-recognized tribes we serve. 

Recently, there has been a little progress. The USDA did begin 

reaching out to us about a year ago to ask about the possibility of 

entering into MOAs directly with our tribes. We think that is generally a positive thing. 

It turned out that the amount of USDA funding for the outreach 

through that MOA for our region to serve the 12 tribes and 8,000 

tribal members was $37,000. For the effort it took to negotiate that 

MOA, I do not know if that amount was particularly cost effective 

in terms of actually improving outreach and access for our tribes. 

Our experience is these MOAs are probably a good thing. It 

shows mutuality, respect and sincerity to reach out but the 

amount, probably at least for our part of Indian Country, should 

at least be enough for one full-time position which we would happily base at our tribal administrative offices. 

I would extend an invitation right here to the USDA. You can 

have an office in our tribal administration building if you funded 

one position just for outreach to our tribes and tribal members. 

There are some very positive things, some significantly positive 

things, which the USDA does for our tribes. 

14 

Maniilaq Association is a tribal organization overseen by these 

12 tribes in northwest Alaska. We suffer from high rates of unemployment, poverty, significant health disparities and Third World 

water and sanitation conditions. 

Over 10 percent of the homes in our region do not have access 

to adequate water and sewer. In these homes, water must be 

hauled from a community source. Tribal members use 

honeybuckets, which are five gallon plastic buckets lined with 

trash bags, to collect urine and feces which are then disposed of, 

in the most ideal circumstances, in a sewage lagoon. 

Lack of adequate water and sewer service in our region causes 

severe skin infections and respiratory diseases. Because of lack of 

adequate water and sewer, our region suffers some of the highest 

rates of invasive pneumococcal disease, IPD, in the Nation. These 

respiratory diseases particularly impact our young children, many 

of whom must be medevaced each year to Anchorage to receive intensive hospital treatment basically to save their lives. 

Access to safe and affordable water and sewer is the very foundation of creating healthy homes and healthy communities in rural 

Alaska and a key to narrowing our significant health disparity 

gaps. The USDA Rural Alaska Village Grant Program, the RAVG, 

part of RD, provides funding for the planning, development and 

construction of water and wastewater systems. These particularly 

impact our region. 

For fiscal year 2016, the USDA RAVG Program helped to fund 

planning studies for a new sewage lagoon in Noorvik, washateria 

upgrades in Kivalina and a list station rehabilitation project in 

Kotzebue. Actual construction funding was provided for the completion of a new water treatment plant in Buckland and repair of 

water service lines and Arctic box connection for homes in Kobuk. 

They also provide technical assistance to help train our operators. This operator training program is critical. When it is 40 below 

or colder and you have serious water and sewer problems, it is critical to have well-trained operators in each of the communities to 

take care of that system and make sure it works no matter what 

the weather. 

Energy costs are a significant issue for us as well. Twenty percent of our residents live in poverty, yet they spend up to $250 per 

month for water and sewer bills. The USDA is helping us through 

a series of programs to help find ways to conserve energy, make 

our systems more efficient, save money and ultimately lower the 

water and sewer bills for many of our lower income tribal members. 

Overall, we are concerned that the total funding for the RAVG 

was $23 million in 2015 but was reduced to $16.5 million in 2016. 

In our region alone, we have over $100 million of critical water and 

sewer project needs. Statewide, the number is about $1 billion. 

We cannot pay for this overnight. We need to chip away at it one 

step at a time. Our thought is that the RAVG funding, which is 

part of USDA’s RD Program, is critical. It makes a huge difference 

in the health and safety of our tribal members, particularly with 

our children. 

We commend USDA for its efficient and effective use of these 

funds. We commend them as well for working closely with our 

15 

tribes and tribal organizations. This program really is making a 

difference in Indian Country and Alaska. 

If the USDA were to look at the RAVG Program as a possible 

model for a pilot program nationally, they might be well advised 

to do that. We would certainly be happy to help and assist in any 

way we can to help out with that. 

That concludes my remarks, Mr. Chairman. 

[The prepared statement of Mr. Schuerch, follows:] 

PREPARED STATEMENT OF TIMOTHY SCHUERCH, PRESIDENT/CEO, MANIILAQ

ASSOCIATION

Introduction 

Maniilaq Association is an Alaska Native tribal organization representing twelve 

tribes in Northwest Alaska. We provide health, social and tribal government services through self-governance agreements with the Indian Health Service (IHS) and 

the Bureau of Indian Affairs (BIA). We are pleased to offer testimony on accessing 

United States Department of Agriculture (USDA) Rural Development (RD) programs. The RD programs offered are received within our communities through the 

lens of need and circumstances of our region. With that in mind, we provide introductory remarks on some of the critical interest areas of our region: climate change, 

clean energy, strategic infrastructure, education and workforce development and 

tribal consultation. 

Northwest Alaska Critical Interest Areas 

Climate Change 

The indigenous Inupiat roots of the people of Northwest Alaska stretch back thousands of years. Our communities have thrived in this remote corner of the globe for 

generations, and it is the traditional ways of knowing and skills that have carried 

our people. While other parts of the nation are just beginning to feel the impacts 

of climate change, Northwest Alaska has been at the forefront of this battle for decades, demonstrating preparedness, adaptation, and resiliency. Rapidly warming 

weather patterns modify the behavior of the animals and fish, and impacts vegetation we rely on to feed our families. Adapting to this new Arctic reality means 

changing how we hunt and gather while bringing together traditional knowledge 

with modern Arctic science to find a logical path forward. We work together, as we 

have done for millennia, in cooperation with one another. 

The State of Alaska is home to 54 percent of America’s 12,383 miles of coastline 

with Northwest Alaska comprising approximately 1,200 of those miles. Four Northwest Alaska communities are located directly on the coast, and seven are within the 

five major river systems. In addition to coastal erosion, we see the effects of river 

erosion as ice melts quickly, the rivers rise and erosion cuts away roads, airports, 

shorelines and changes animal migration routes. After the initial surge, the rivers 

recede and residents report the rivers are actually lower than in previous years. It 

has been many years since our communities including Noatak, Shungnak, Ambler 

and Kobuk, have had goods delivered by barge, which greatly reduces the cost. In 

the community of Noatak, the river has eroded major roads, making transportation 

dangerous to its residents. 

Our region is home to the village of Kivalina, one of the world’s most visibly impacted communities. Situated on a low-lying barrier island, Kivalina historically 

was protected from the Chukchi Sea by a layer of thick ice. However, rising global 

temperatures melted the protective Kivalina ice sheet. Now, fall and winter storms 

barrel into the community, bringing floods and severe erosion in their wake. Water 

resources, subsistence foods, critical infrastructure, economic development, education of children, and the overall quality of life is at risk because of a warming 

environment. Coastal erosion in Kivalina impacts every resident, every day. The 

U.S. Army Corps of Engineers predicts the current village site will be completely 

uninhabitable within 10 years due to melting ice, coastal erosion and rising sea levels. Building of this road is imperative now for the safety of village residents. It is 

not within the purview of any federal agency to currently assist and we urge you 

to designate and give appropriate authority to a federal agency to address community evacuation needs. 

Increased partnership, collaboration and funding is increasing in importance as 

climate change continues to threaten the lives of Americans residing in the Arctic. 

16 

Clean Energy 

Renewable energy and innovation has been a key component of the energy picture 

in Northwest Alaska. A case in point is the Kotzebue Electrical Association (KEA) 

Wind Farm, the northernmost wind farm in the United States. Since 1997, it has 

supplemented diesel power in Kotzebue and currently provides 20 percent of the 

town’s electricity needs. Boasting the first utility grade wind farm in the state of 

Alaska, Kotzebue Electric Association installed three 66-kW turbines in 1997. By 

2011, the Kotzebue wind farm had grown to 17 wind turbines and represented the 

first megawatt of wind power in Alaska. Kotzebue now has a total installed capacity 

of 2.96 MW of wind, which displaces about 250,000 gallons of diesel every year. 

Today, the company is looking toward harnessing secondary loads for excess energy 

by supplying thermal energy to the local hospital and will be installing a utility 

scale lithium ion battery. Being above the Arctic Circle means there are more daylight hours in the year than in the rest of the U.S. The Northwest Arctic Borough 

sponsored solar installations in all of the regions communities to lower the cost of 

water and sewer with funds from the U.S. Department of Interior Coastal Impact 

Assistance Program (CIAP) grants. Solutions like this are helping but costs continue 

to remain high. 

Traditional non-renewable fuels are still needed for generation of electricity and 

for home heating in rural Alaska. Many Department of Energy programs focus solely on renewable energy. Our region is focused on a coordinated approach that includes hybrid systems designed to reduce diesel consumption and increase use of renewable energy as we recognize this is what will make Arctic projects successful. 

Strategic Infrastructure 

As the world directs its focus northward, the U.S. lacks infrastructure in the Arctic. From a strategic perspective, Kotzebue is an ideal location to invest in infrastructure like ports, roads, energy upgrades and broadband because of its geographic position. Investing in our region will not only benefit the residents of Northwest Alaska today, it will provide the backbone of Arctic Infrastructure essential to 

national security and economic interests for generations to come. 

For more than 30 years, the City of Kotzebue, with support from partner organizations, has been working toward the building of a deep water port south of 

Kotzebue at Cape Blossom and an 11 mile road connecting our city and port. Currently, the region receives essential items such as fuel, vehicles, building supplies, 

and dry goods by barge and lightering service in Kotzebue. All village-bound products are transported from Kotzebue by small boat or airplane. The shallow-water 

lightering adds greatly to the cost of goods in Kotzebue and all of its outlying villages. The Cape Blossom Port will provide economic relief to all of the communities 

in Northwest Alaska by reducing the need for lightering. Moreover, the Cape Blossom Port is uniquely positioned in a safe harbor area that will allow the U.S. Coast 

Guard and other emergency response resources to respond to ship groundings, vessel emergencies and oil spills in the Arctic. A port at Cape Blossom will provide the 

United States a strategic location in the Arctic for future opportunities. 

Education and Workforce Development 

Currently the unemployment rate for Alaska is 6.9 percent. Northwest Arctic’s is 

250 percent of the State of Alaska rate. In some villages up to 70 percent of the 

adults do not work. The workforce needs education and specific job training for the 

jobs that exist as well as for future jobs and careers designed to meet future challenges within the State and region. Our educational system is poised to prepare our 

students to meet these challenges. The Northwest Arctic Borough School District is 

the only public school district in the State with its own post-secondary training center school, the Alaska Technical Center. A new magnet school has been developed 

as partner to the Alaska Technical Center that is a school for high school and postsecondary students, the Star of the Northwest. The innovative educational and job 

training programs we have established in Northwest Arctic require funding for increasing infrastructure and operational costs. Gap funding by the Federal government can make a significant impact for the good of the Inupiat people of Northwest 

Arctic. 

Tribal Consultation 

We appreciate the recognition of tribal governments’ unique legal relationship 

with the United States, as expressed in the Presidential Memorandum on Tribal 

Consultation and Executive Order 13175. We understand that the USDA has a tribal consultation policy in place, and we encourage and remind the USDA to implement it consistently. 

17 

First, I would like to thank the Alaska Office and the Office of Tribal Programs 

for their periodic electronic newsletters and notices. We appreciate that the staff 

make an effort to compile and distribute information about USDA funding, training 

and other opportunities. 

Accessing USDA RD Programs in Northwest Alaska 

Below are some of the specific ways in which the opportunities provided by USDA 

RD have been meaningful to Maniilaq Association. 

Alaska Code Blue Project 

The Alaska Code Blue Project was started in 1999 in an effort to identify, 

prioritize and seek funding for essential equipment for rural emergency medical 

services in Alaska. Funding for the Project is provided by the State of Alaska, 

Denali Commission, tribal health corporations, communities, local emergency medical services, and USDA RD. The contribution of USDA to this program has been 

key to its success. In the past, it has helped us purchase much-needed medical 

equipment and has been crucial to the operation of our telemedicine program, which 

enables us to provide health care in some of the most remote villages in the world. 

This year, we are applying for funds to contribute toward the purchase of a patient 

transportation vehicle for the Kivalina Clinic. 

Utuqqunaat Inaat Loan Guarantee 

In 2012, USDA RD guaranteed a loan which comprised a portion of the total funding used to build Utuqqunaat Inaat, our 18-bed long term care center we opened 

in 2011. Utuqqunaat Inaat, meaning a ‘‘place for Elders’’ in the Inupiaq language, 

is one of our most treasured facilities, because it enables Elders to remain in their 

home region throughout the last of their days rather than having to be sent to Anchorage or further to receive the care they require. 

Also of tremendous importance to our operation of Utuqqunaat Inaat was the Agricultural Act of 2014 (also known as the ‘‘Farm Bill’’) Section 4033, which allows 

the donation to and serving of traditional food through food service programs at 

public facilities and non-profit facilities operated by Indian tribes and tribal organizations. Traditional foods were defined to include wild game meat, fish, seafood, marine animals and plants and berries. On September 2, 2015, Maniilaq served the 

first meal authorized by this Act at Utuqqunaat Inaat—musk ox soup. It was a day 

of celebration in Kotzebue, and USDA staff were there to celebrate and eat with us. 

Cooperative Agreement 

Last fall, Maniilaq and USDA signed a Cooperative Agreement for the period of 

September 30, 2015 through December 31, 2016. The purpose of the Agreement is: 

‘‘to improve access to Rural Development programs to remote and isolated regions of Alaska. The Agreement will support Rural Development’s StrikeForce 

and community economic development efforts and enhance Native American 

business development by leveraging partnerships and resources of diverse institutions and organizations.’’ 

The total amount of federal funds obligated under the Agreement is $37,000. As 

a tribal nonprofit corporation providing health, social and tribal government services, we are pleased that the USDA sought to partner with us; however, the purpose 

of the Agreement aligned better with the work of the Northwest Arctic Borough economic development department. Therefore, we subcontracted with the Borough to 

implement the Agreement. The Borough has held community meetings in 10 villages, met with the city and tribal governments, and distributed materials containing information about USDA programs in each of those villages. The Borough 

has made updating on USDA programs a part of its regular monthly Assembly 

meetings, after which Assembly members are able share the information with their 

constituent communities. We are grateful for the opportunity to disseminate information about the USDA’s programs in our region. The challenge we face is that the 

federal obligation under the Agreement is capped at $37,000. This is not enough to 

fund a full-time position; therefore, the function is required to be tacked onto an 

existing position. With limited resources, we rely heavily on the person filling that 

position to have the capacity to add the USDA work to their already full plate. 

Water and Sanitation Projects 

We thank the Rural Alaska Village Grant Program (RAVG) for helping us to address the urgent need for adequate water and sewer systems in Northwest Alaska. 

Every one of the 12 villages in our region has significant water and sanitation deficiencies. Although progress has been made, some of our villages, such as Kivalina, 

are still without running water and sanitation systems. Water must be hauled from 

18 

a community source, and residents use 5-gallon buckets (commonly referred to as 

‘‘honeybuckets’’) to dispose of human waste. 

A key to the USDA’s successful outreach to meet the critical water and sanitation 

needs of our villages is the partnerships it has developed with and other Federal 

and State agencies. In our experience, the USDA’s StrikeForce Initiative for Rural 

Growth and Opportunity has been effective in addressing some of our region’s most 

critical water and sanitation needs, and we encourage the USDA to continue that 

program. 

Conclusion 

Challenges to the health and economic well-being of Northwest Alaska remain. 

However, we are optimistic that with commitment, collaboration and hard work we 

will implement positive change and enable our region to thrive. Thank you for your 

consideration of our views. 

SUPPLEMENTAL TESTIMONY

Rural Alaska Water and Sanitation Needs in Northwest Alaska 

Maniilaq Association is a tribal organization that is overseen by and serves twelve 

federally recognized Tribes of Northwest Alaska. We suffer from high rates of unemployment, poverty, great health disparities, and Third World water and sanitation 

conditions. 

Over 10 percent of occupied homes in Northwest Alaska do not have access to adequate water and sewer systems. In these homes, water must be hauled from a community source, and tribal members use ‘‘honey buckets’’ (5-gallon plastic buckets 

lined with a trash bag) to collect urine and feces, which are then disposed of in a 

sewage lagoon. 

Lack of adequate water and sewer service in Northwest Alaska causes severe skin 

infections and respiratory illnesses. Because of lack of adequate water and sewer 

service, our region suffers some of the highest rates of invasive pneumococcal disease (IPD) in the nation. These respiratory diseases particularly impact our young 

children, many of whom must be medevac’d to Anchorage each year to receive the 

intensive hospital treatment that is necessary to treat their condition. 

Access to safe and affordable water and sewer is at the very foundation of creating health homes and healthy communities in rural Alaska. The USDA Rural 

Alaska Village Grant (RAVG) program provides funding for the planning, development, and construction of water and wastewater systems to improve health and 

sanitation in rural Alaska villages. 

Water and Sanitation Projects 

In FY16 the USDA Rural Alaska Village Grant (RAVG) program helped fund the 

following work for our tribes: 

1. Planning studies for a new sewage lagoon in Noorvik, washeteria upgrades 

in Kivalina, and a lift station rehabilitation project in Kotzebue. 

2. Construction funding for the completion of a new water treatment plant in 

Buckland and repair of water service lines and arctic box connections for 

homes in Kobuk. 

Technical Assistance and Training 

RAVG grants are also used to provide technical assistance and training. Our tribal organization is currently working with USDA in Alaska to secure $102,000 in 

FY16 technical assistance and training funds to educate and empower rural water/ 

wastewater operators and utility administration. 

RAVG provides funding for the State of Alaska’s Remote Maintenance Worker 

(RMW) Program, Remote Maintenance Workers are often the only frontline responders to help our communities solve technical water and sewer system issues. With 

winter temperatures below—40 degrees Fahrenheit, a quick and effective response 

is absolutely essential to maintaining services. 

Lowering Ongoing Energy Costs 

RAVG also assists with lowering ongoing energy costs. The cost of providing water 

and sewer in rural Alaska is expensive due to the extreme weather, geographic isolation, engineering complexities, and high cost of energy. Some communities must 

charge up to $250 per month for water and sewer despite the fact that over 20 percent of their residents live below the poverty level. To help lower these costs, the 

USDA RAVG program has provided up to $40,000 in grant funding to implement 

19 

the energy efficiency recommendations identified by the Alaska Native Tribal 

Health Consortium’s energy audits of water and sewer infrastructure. 

Energy efficiency projects impacting our tribes include supporting Kobuk and 

Ambler with efficient lift station pumps; supporting Deering with sewer vacuum 

pump installation costs and training; and supporting Noatak with improving the energy efficiency of their boilers. 

Trends and Future Funding 

Statewide, in FY15 the RAVG program contributed $23 million dollars towards 

Alaska sanitation project funding. However, in FY16 they contributed $16.5 million 

dollars, a $6.5 million decrease. In Northwest Alaska alone, we currently have unfunded critical sanitation project needs totaling of over $100 million dollars. Statewide, the unfunded critical sanitation project need is about $1 billion. We respectfully ask that the USDA continue to support the highly successful RAVG program 

at FY15 funding levels to continue to make meaningful progress in meeting these 

needs. 

We also respectfully ask that the USDA consult with all impacted tribe if it cuts 

funds or reduces services of this critical program in the future. 

Conclusion and Recommendations 

It is our experience that the USDA’s Rural Alaska Village Grant program is a 

highly effective, efficient means for leveraging local, state and federal funds to address the critical water and sanitation needs in our corner of Indian Country. Many 

of our tribal members now can now provide their children with clean and safe water 

and sanitation because of projects supported by the USDA’s Rural Alaska Village 

Grant program. We commend USDA for its work and recommend it consider using 

the RAVG as a model for a national pilot program for Indian Country. 

The CHAIRMAN. Thank you very much, Mr. Schuerch. 

We appreciate the testimony of each of you today. I would like 

to start the questioning with Senator Murkowski. 

Senator MURKOWSKI. Thank you, Mr. Chairman. 

First, to you, Ms Salerno, you mentioned the cooperative agreements. I do encourage the department to make some real investment here and to ensure that there is proper outreach. 

Your comments, Mr. Schuerch, about the amount of funding that 

is available for the outreach, the reason you do outreach is because 

it is tough to get to these places. Tough means expensive, but making sure there is awareness is critically important. 

There has been discussion about housing, the need for housing 

and housing infrastructure. Right now, representatives from HUD 

are in Alaska having some meetings with housing agencies and 

tribes from around the State. 

I would like a commitment from you that you will work on interagency communications with agencies like HUD, with the tribes in 

the State or with Native CDFIs, to examine how we can better invest in infrastructure and housing in rural Alaska. I would ask for 

your continued commitment to work in that regard. 

Ms. SALERNO. You have that commitment. We recognize we have 

challenges. Some of our programs are not perfectly tailored to the 

needs of Native communities for the host of reasons that were described. 

We are trying to do better to make sure our staff is trained and 

that we work with other parts of the Federal family. Part of that 

was evidenced earlier this month. We held tribal housing training 

which included BIA, HUD and the Consumer Financial Bureau. We 

are trying to come up with some creative solutions, so you have our 

commitment to keep working on that. 

20 

Senator MURKOWSKI. I think you have a great offer there from 

Maniilaq saying we have housing for you. If you are looking for on 

the ground education, it can certainly be provided there. 

Tim, I really appreciate what you have said in terms of the need 

for continued cooperation, collaboration and outreach making sure 

that what is available understood. I agree with you. People are 

coming to my office and do not know what is available, so are looking to us to marry them with the opportunities. We say USDA is 

out there, but you ought not to have to come all the way to Washington, D.C. to find that it is available. 

You mentioned the RAVG funding and the grants that are available for water and sewer and the difference that it makes. I know, 

because I hear it when I am back home, that these are making a 

difference. 

I appreciate what you have outlined to the Committee in terms 

of some of the issues we are dealing with. We are talking about 

basic needs, water and sewer. We are not talking about big systems 

or upgrade systems. We are talking about installing them for the 

very first time, to be able to have a water system. To be able to 

have a toilet that you can flush for the first time is news-breaking. 

It is worthy of ribbon cuttings, and I have been there as we have 

flushed a toilet multiple times in Buckland. 

You mentioned washaterias. I actually had somebody ask me 

why are you all spending money for basically a washateria? Does 

nobody have a washing machine? We do not have water and sewer, 

so not only do we not have washing machines in a person’s home, 

we do not have water so you can wash hands. We do not have a 

shower so you can bathe your children. 

A washateria is a place where you go to wash your clothes but 

it is also the place that you go for a shower. We are talking about 

some pretty basic things. These grants that are made available are 

significant. 

When we talk about basic infrastructure, we are not asking for 

fancy stuff, but it is a high cost. It is critical to the health of people 

out in these regions. 

Tim, I have run out of time but was going to ask you, in terms 

of partnering more and better with USDA, short of having them 

housed in your facility, what can we be doing better here to help 

facilitate that? 

Mr. SCHUERCH. That is a hard question. 

Senator MURKOWSKI. You can think about it. We can work to develop that because I think going forward, that is exactly what we 

need to be doing, that partnering. 

Mr. SCHUERCH. Adequate funding of the Rural Alaska Village 

Grant Program. It is not enough money to meet all of the need but 

it is a real important part of the solution. It is my experience and 

the experience of our tribes, that money is being well used to make 

a difference in the lives of many tribal members, particularly the 

kids. 

Senator MURKOWSKI. We will keep working on that with you. 

Thank you. 

Mr. Schuerch, we would welcome you to Kotzebue anytime. 

Ms. SALERNO. Thank you, Senator. 

Senator MURKOWSKI. Thank you, Mr. Chairman. 

21 

The CHAIRMAN. Thank you, Senator Murkowski. 

Senator Heitkamp. 

STATEMENT OF HON. HEIDI HEITKAMP, 

U.S. SENATOR FROM NORTH DAKOTA 

Senator HEITKAMP. Thank you so much, Mr. Chairman, for holding this hearing. 

I think we all agree that permanent solutions can be found in 

economic opportunity in Indian Country and Native Alaskan Country, but economic opportunities are really not possible without infrastructure. There is no two ways about it. 

One of the most difficult pieces of infrastructure is housing. I 

have been shocked that we have been unable to complete 

NAHASDA. It is a cornerstone piece but I also know that 

NAHASDA in and of itself is not adequate to meet the housing 

needs. 

Recently on a trip to Turtle Mountain, Secretary Castro was in 

the first HUD housing project in Indian Country. He was devastated to see the disrepair and the conditions it was in and nothing to write home about. They had just come from Pine Ridge and 

believed the housing conditions in Turtle Mountain were actually 

worse than Pine Ridge, if you can imagine. 

I know you have since designated Turtle Mountain a Promise 

Zone. We look forward to implementation of that, but if we keep 

doing what we have always done, and even do it slower and less 

efficiently, we are going to fall further and further behind in terms 

of affordable housing. 

I want to tell you that Secretary Castro, I hope, will be in North 

Dakota having a HUD regional housing summit. We have been 

talking to our partners in Rural Development. We are hoping we 

will get some good ideas that can do public-private partnerships because there is not enough money here to do the things we need to 

do. 

With that said, I think, Ms. Salerno, Senator Tester and I were 

both quite honestly kind of shocked by the numbers. I think the 

Chairman said $212 billion in loan guarantees with only $3.1 billion actually in Indian Country. 

I recognize that some of those loans would cover Indian Country 

if they were given to the rural coop that is responsible for Indian 

Country or to an electric coop, but I do have to tell you that is inadequate, given that in our States, it is the highest poverty area 

in terms of rural poverty. 

If they did not apply, then we should know there is a problem 

outreach. We should know that somehow the repayment terms 

could be readjusted or the fear of taking on debt is one of the issues 

we are challenged with all the time in terms of Indian Country. 

I want to ask, beyond what Senator Murkowski talked about, 

this is to you Mr. Haugen probably, why is it that we only have 

such a small percentage of the commitment for Rural Development 

that has been deployed to Indian Country directly? Why do you 

think that is? 

Mr. HAUGEN. Personally, I think what we have been talking 

about for the last couple of minutes is the biggest reason. We do 

not have that outreach, that one-on-one. In addition, one of the 

22 

grants we received two years ago, the Housing Preservation Grant, 

when we went to implement it with the local USDA representatives 

out of Billings, they were unsure how to implement it even though 

they had talked about having this grant for years. They were unsure how to implement it so it set us back a couple of months. I 

think the fact that USDA has lost some of their key staff is probably one of the reasons there has not been much outreach. 

Senator HEITKAMP. Ms. Salerno, can you offer some suggestions 

on how we could do a better job addressing needs in Indian Country with USDA funding? 

Ms. SALERNO. A couple of things, Senator Heitkamp. I just want 

to make sure we are talking apples to apples. The loan portfolio is 

$212 billion over our history. Rural Development is pretty much a 

development bank that also provides grants. 

It is not a $3.12 billion over $212 billion; it is what we get from 

our appropriated dollars. When we did $500 million in Indian 

Country last year, that is out of approximately $29.5 billion. 

It still may not be enough; it probably is not enough, but it is 

over that year period so the percentages are 5 percent. It is $500 

million over $29.5 billion what we put out. 

The $3.1 billion that we have done in the Obama Administration 

is about double what we did over the previous eight years. We are 

making traction. 

What you are worried about is, are we doing enough outreach? 

Why are we not getting a bigger percentage? 

Senator HEITKAMP. I worry that if we are going to create economic opportunity in Indian Country, we need infrastructure. That 

is what I am worried about. If we do not have infrastructure and 

commitment to build infrastructure, we will continue to experience 

incredible rates of tribal poverty. 

I know the commitment that has been made by this Administration but know our frustration. I am out of time but I want to continue and hopefully we will be able to get some good ideas from the 

housing summit. 

I think curb and gutter, those kinds of things, the embedded 

costs, if we did not have to worry about the road, the sewer, the 

water, and all of the additional costs and just focus on actually 

building the home, we would be so much farther ahead in home 

ownership. 

These are difficult problems. We know what a great partner, in 

many cases, USDA has been. We are hoping that we can enlist 

even further partnership. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Heitkamp. 

Senator Moran. 

Senator MORAN. Mr. Chairman, thank you very much. 

Ms. Salerno, we have had conversations with our four tribes in 

Kansas about this topic and have reached out as well to our Topeka Rural Development office. I was generally pleased to learn 

that our tribes believe that the Rural Development State officials 

are doing a good job and have highlighted for me a number of 

projects in which they have been involved, all of which seem very 

useful and appropriate. 

23 

In fact, one of our tribes indicated their experience with Rural 

Development in Topeka was wonderful. Perhaps as part of this conversation about outreach, it may be a State focus issue as well as 

what happens here in the Nation’s capital, how much outreach is 

occurring by the State Director. 

Noting that relationship that was described to me, I would ask 

this question. How does USDA go about coordinating between 

Rural Development offices and in the bigger picture of promoting 

this nationwide? Is there flexibility at home in Kansas and other 

States or is this Washington, D.C.-driven? 

Ms Salerno. That is such a good question. 

You know our State director in Kansas, Patty Clark, who has 

done an amazing job. We give a lot of authority to the States. All 

the programs are not decided in Washington, D.C. The State directors do have a lot of influence in how the outreach and dollars go 

out. 

Probably part of what we see in some of these big geographic 

Plains States where the geographies are so big, when you look at 

FTEs, it is about population. Some of the big Plains States, and 

certainly a place like Alaska, huge territories where we do not have 

enough personnel, I think that might be some of our challenge. We 

need to figure out ways to address those. 

Senator MORAN. That point was somewhat evident to me because 

our four tribes are generally located around the State capital, Topeka, where RD is headquartered. The outreach would be much 

simpler, and Alaska is a good example, but even in our own State, 

if the tribes were elsewhere, I would not be surprised that there 

is less outreach. 

Senator Heitkamp and I worked to pass legislation generally referred to as the General Welfare Exclusion Act, not that you should 

know anything about that in your job at USDA. It involves the relationship between tribes and the Internal Revenue Service. The 

constant concern, and there was plenty of evidence before and after 

passage of the legislation, is that the IRS agents were not at all 

properly trained in interacting with tribes, in understanding tribes 

and understanding the culture and the governance. 

I just would give you the opportunity to elaborate, if you could, 

to explain that there is an effort at USDA Rural Development to 

do something different than what my experience has been with IRS 

agents. 

Ms. SALERNO. We have an Office of Tribal Relations that is our 

face to tribes and it counsels us and makes sure that our programs 

are sensitive to the cultures maybe loan specialists serving a tribe 

may not know. 

We also have a working group for everything tribes within 

USDA. We have an office that coordinates throughout the Federal 

family. I am sure we can do better. 

Senator MORAN. Let me ask this question. You indicated that effort is made to educate. Would the folks I know in my Rural Development office in Topeka have had specific training through USDA 

with regard to issues in dealing with tribes, not just the programmatic issues but the more perhaps subtle issues of culture, relationships and governance or do we wing that? Maybe Kansans 

just figure this out on their own, how to relate to each other. 

24 

Ms. SALERNO. It is all collateral duties. We have someone named 

as the Native American Coordinator in every State. That person 

may also be wearing the hat of the strike force coordinator, civil 

rights or administrative officers. It may be where that person cannot spend more than 20 percent of their time as Native American 

Coordinator. 

The more our personnel are trained by having interaction with 

tribes, one of the things we know and have learned is it is about 

relationships. I think the point of my colleagues here, that we have 

lost staff, so we probably have lost long term relationships with 

tribes. 

I think this does give us another opportunity to make sure with 

the new folks Congress has given us the opportunity to hire, making sure we get them up to speed on outreach. I just could not 

speak to whether those particular people were trained. 

Senator MORAN. Thank you for your testimony. Thank you to 

both of the gentleman for their testimony also. I knew you would 

find an opportunity to suggest more staffing and therefore, more 

appropriations were valuable. 

The CHAIRMAN. Thank you, Senator Moran. 

Senator Franken. 

STATEMENT OF HON. AL FRANKEN, 

U.S. SENATOR FROM MINNESOTA 

Senator FRANKEN. Thank you, Mr. Chairman, for holding this 

important hearing. 

I am going to touch on Mr. Haugen’s testimony and Senator 

Heitkamp’s discussion about housing. 

As of 2015, children represented just under 40 percent of the 

homeless population living on reservations in Minnesota. Additionally, almost half our homeless population on reservations has been 

waiting over a year for housing support. 

In the meantime, 74 percent of them are living in overcrowded 

spaces. Very often, as you know, this can be with another family 

in small living spaces. This can cause concerns about safety, communicable diseases, also increased trauma, exposure to domestic violence, drug use, alcohol abuse, and sexual abuse. These can have 

a dramatic impact on children. 

A 2012 report by Wilder Research said that overcrowded housing 

can, speaking about children, ‘‘threaten their educational success, 

health and mental health and personal development.’’ This problem 

is not confined, of course, to Minnesota or to one tribe. A disproportionate number of homes on tribal lands are inadequate, overcrowded or unaffordable. 

Mr. Haugen, you touched on this a lot in your testimony and 

talked about NAHASDA needing USDA support. In your experience, how have USDA’s housing programs been successful and 

what else can USDA be doing in regard to housing issues in Indian 

Country? 

Mr. HAUGEN. I guess, in my own opinion, what is lacking at 

home is the fact that we do not meet the requirements of some of 

these housing programs as tribes with regard to a tax base, bonds, 

stuff like that. We do not have that on the reservation, so autoVerDate Mar 15 2010 13:28 Oct 18, 2016 Jkt 022135 PO 00000 Frm 00028 Fmt 6633 Sfmt 6601 S:\DOCS\22135.TXT JACK
25 

matically we are kicked out from even applying for this program 

or that program. 

There are so many programs they offer. So we have asked over 

and over, as Ms. Salerno alluded, the State director has told me 

personally that he has the authority to waive certain restrictions 

with these programs. Why that has not happened in the past, we 

do not know but we are hoping. Ironically, I met with our State Director, John Walsh, on Monday. 

Senator FRANKEN. The State Director of USDA? 

Mr. HAUGEN. Yes. I am willing to do anything we need to do to 

make a better relationship with all the tribes, so fingers are 

crossed. I am sure Mr. Walsh will keep his word. I think something 

as simple as just having the authority to waive some of these 

things so we can make this happen is what is needed. 

Senator FRANKEN. Do the State directors have that authority, 

Ms. Salerno? 

Ms. SALERNO. I am not certain. I really appreciate the sentiment 

around the homeless piece. It is heartbreaking. USDA is a member 

of the U.S. Interagency Council on Homelessness. I read those reports and the numbers are just unbelievable. I do not know about 

that authority specifically. 

Senator FRANKEN. Can you get back to us on that? 

Ms. SALERNO. Absolutely, I will do that. I just wanted to let you 

know that we are looking for creative solutions. 

Senator FRANKEN. That sounds like a pretty good creative solution. 

Ms. SALERNO. I just would not speak without knowing that is 

something we are prevented from doing by our statutes and our 

regulations. 

One thing we are doing is we are partnering with the Federal 

Reserve Bank of Minneapolis, the Federal Reserve Bank of San 

Francisco and Neighbor Works to have a convening, in Arizona, to 

bring in a bunch of smart people around the table to figure out if 

there are partnerships we need to lean on to try to help craft some 

solutions. We have been working on this. We will get back to you 

with what we come up with. 

Senator FRANKEN. Please do because if that is the case, then that 

seems to be one avenue for some creative solutions. 

I am out of time, Mr. Chairman. May I say a little more? 

The CHAIRMAN. Please do. 

Senator FRANKEN. When there are housing shortages, that 

makes it harder for a tribe to recruit people for law enforcement, 

teachers, principals, and health care folks because someone will be 

coming in and the spouse will go, what is the housing going to be 

like? 

If you are a doctor and the housing is not good, maybe you will 

not go. If you are a teacher and the housing is not good, the Indian 

Health Service is not so good because they cannot attract doctors, 

you may not want to go as a teacher. 

This is part of the cyclical problem. Part of that is economic development. That is why I got into Energy and Water Appropriations. I want to thank the Chairman for helping on that to get just 

a $9 million loan program that can be leveraged to do like $85 million worth of projects. 

26 

We need more economic development. We also need more money 

for housing and infrastructure. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Franken. 

Senator Hoeven. 

STATEMENT OF HON. JOHN HOEVEN, 

U.S. SENATOR FROM NORTH DAKOTA 

Senator HOEVEN. Thank you, Mr. Chairman. 

Ms. Salerno, I want to direct my questions to you. I thank all the 

witnesses for being here. 

Recently, the Turtle Mountain Band of Chippewa Indians in my 

State was designated as the pride of the Great Plains Promise 

Zone. They are also collaborating with Spirit Lake Nation which is 

in the Devils Lake area. We are excited about that. 

I guess I would like to discuss with you the Promise Zone, a little 

bit in terms of how it works and how you think it can be effective, 

what we can do, maybe some examples of things that have been 

done in other places that have worked well and maybe how we 

want to market and get the word out, those kinds of things. 

Ms. SALERNO. I am very excited about the designation in your 

State. We have had some experience. The Promise Zone is just 

that, a promise without money but it is a ten year commitment. In 

the past the Federal family did not always work well together; we 

are going to put navigators, like a desk officer, a point of contact, 

in a distressed area. 

We are going to make it so that when a tribe or a community, 

the designees, need something, that they get to know about every 

grant we can locate that they could possibly have an opportunity 

to apply for, loan or partnership opportunity and make sure that 

we do sort of intensive care for that area. 

USDA leads the Promise Zone efforts for rural and tribal areas. 

Our experience has been with the two prior designees which are 

Choctaw Nation in Oklahoma and Pine Ridge Reservation in South 

Dakota. 

Just so you have some numbers, since the designations occurred 

for Pine Ridge, there has been $20 million of investment into Pine 

Ridge. That is just out of the USDA family. For Choctaw Nation, 

there is approximately $100 million that has gone there. 

Real numbers come, but a lot of that is because there are folks 

there who can help access the Federal Government by writing planning documents, charting that path and taking assessment of, in 

this case, the Turtle Mountain part of the application which was 

an excellent application. It is about making sure they take advantage of some of the great food economy and other things. 

We have designated a local point of contact and a desk officer 

here in Washington. And there is an excellent Rural Development 

State Director Ryan Taylor who will play a major part as well as 

the NRCS State conservation person. Those meetings are happening already. 

There is lots of activity with all the Federal family trying to 

make sure any resources are made available. We are so excited 

about these two new designations and we will now have four examples where the Federal family really worked well together. 

27 

It is not that we do not work well together. It is just real intentional for these Promise Zones to have something that we can use 

these best practices for all tribes. 

Senator HOEVEN. Is it the navigators that actually go to the reservation and work to access some of those Federal programs when 

you talk about the $20 million for Pine Ridge or the $100 million 

for Choctaw Nation? 

Ms. SALERNO. Any of the applications for grants or loans, because it is a Promise Zone designation get priority points from the 

Federal family. That is why they are elevated. That is why their 

chances of getting Federal funds go up. 

Senator HOEVEN. Are there tax credits that go with it or tax benefits for companies that will locate there and hire people? 

Ms. SALERNO. Not at this time. 

Senator HOEVEN. It is primarily accessing Federal programs for 

help? 

Ms. SALERNO. We have that because the Federal Government 

has gone there first, other folks come in. For example, for Choctaw 

Nation, more lenders are coming in which is part of the public-private partnership. 

Senator HOEVEN. Can you give me an example of any of the 

things they have done that have been particularly successful or 

things we maybe should look at? 

Ms. SALERNO. For example, in Choctaw Nation, they were able 

to get RD money for a community facility. For the Choctaw Nation, 

which is in Oklahoma, they were able to put together a community 

center which was a Head Start, food distribution and wellness center altogether. These facilities were funded by both USDA and 

HHS. Because it had the Promise Zone designation, this created 

about $93 million of Federal investments. Also there was some 

kind of banking relationship but I will have to get you more information on that. That was a $93 million investment. 

Senator HOEVEN. It is up to the tribe and their navigator to come 

up with these ideas in terms of what they want to do and what programs to access? 

Ms. SALERNO. When the tribes submitted their applications, they 

worked really hard, the applicant, to put together how they would 

use this designation by building out economic opportunities and 

economic development. 

Senator HOEVEN. Thank you very much. 

The CHAIRMAN. Thank you, Senator Hoeven. 

Ms. Salerno, in 2010, the USDA settled a class action lawsuit 

filed by a group of Native American farmers and ranchers alleging 

some discriminatory practices by the Farm Service Agency within 

USDA in its issuance of various farm loans to the Keepseagle litigation. 

I understand these loans involved in the class action involved the 

Farm Service Agency and not Rural Development. The type of discriminatory practice can cause some distrust of the agency as a 

whole. 

When compared to the Farm Service Agency, Rural Development 

administers a similar set of financing instruments through their 

loan, loan guarantee and grants portfolio. Has the Rural Development branch taken steps to market the programs and conduct outVerDate Mar 15 2010 13:28 Oct 18, 2016 Jkt 022135 PO 00000 Frm 00031 Fmt 6633 Sfmt 6601 S:\DOCS\22135.TXT JACK
28 

reach in such a way as to eliminate any types of discriminatory 

practices that tribal farmers and ranchers faced in the past? 

Ms. SALERNO. The Keepseagle litigation was the tribal litigation. 

The Farm Service Agency was the agency involved. We are one 

USDA. Rural Development and all the sister agencies are all committed to serving Native Americans. 

In our Rural Development mission, we are very cognizant and 

work closely with our Office of Tribal Relations, our Native American coordinators, our State directors and those States that have 

tribes are committed to serving Native Americans. 

We host webinars, we go to conferences, take the lead from the 

Office of Tribal Relations, a robust and active organization, where 

they train us on how to deal with tribes. We are doing that at this 

time. 

The CHAIRMAN. Your testimony outlined all the different ways 

the USDA is getting funding into tribal communities. In the tribal 

communities that have successfully navigated the bureaucratic 

nightmare, assistance programs kind of tell the story. 

From your own Under Secretary testimony, less than 1 percent 

of the rural tribal housing funds allocated by the USDA are actually reaching the tribes. Do you have any metrics you use in terms 

of trying to identify even if those efforts are working to get the outreach when you take a look at these kinds of numbers? 

Ms. SALERNO. That is a very good question. One thing is the outreach. Another thing is about the uptick in the programs. We certainly keep track of how many tribes we speak with. We encourage 

our outreach staff as well as our Office of Tribal Relations which 

is our lead on that, but there is a lot of outreach. 

I do not think the outreach is representative. The outreach is 

amazing. I think the uptick on housing is not amazing. That is 

what we are speaking about today. We need to do better. I think 

that has to do with the back end which has to do with trust lands 

and other issues that we need to resolve. 

The CHAIRMAN. Mr. Schuerch, you and Senator Murkowski mentioned 2012, when the USDA closed a number of rural offices in 

Alaska that did provide some of this outreach. You discussed in 

your written testimony the need for the USDA to continue implementing the tribal consultation policy in a consistent manner. 

What type of consultation did USDA provide before they closed 

down the rural offices? Could you kind of run through what they 

were doing, helping and providing in terms of the outreach? 

Mr. SCHUERCH. Outreach was better. Now they work primarily 

out of their Palmer office which is sort of a centralized location in 

Alaska in terms of reaching out to us. It is pretty good. They come 

up maybe two or three times a year. We know who they are. They 

have community meetings in Kotzebue at least. In general, we 

know who they are; they come and talk to us. 

The real challenge right now is at the local level. Our local 

tribes, tribal members, and our tribally-owned businesses do not 

necessarily know what all the USDA programs are right now. That, 

in my view, is where the real need is right now. 

We need at least one energetic, knowledgeable person from the 

USDA or somehow partially funded by the USDA, to go to work 

every day and help our tribes, our tribal members, our triballyVerDate Mar 15 2010 13:28 Oct 18, 2016 Jkt 022135 PO 00000 Frm 00032 Fmt 6633 Sfmt 6601 S:\DOCS\22135.TXT JACK
29 

owned businesses, and local businesses learn about their programs 

and what they can do to participate in the programs to benefit 

their business, their tribes and the economy as a whole. 

Despite the successes of the RAVG and some other programs, 

that is the missing piece right now, the local, on-the-ground presence. That is what we need. 

The CHAIRMAN. Thank you. I want to thank all of you for being 

here today and answering the questions. 

As you know, members may also submit written follow-up questions. The hearing record will stay open for another two weeks. 

I want to thank all of you for your time and your testimony. The 

hearing is adjourned. 

[Whereupon, at 3:48 p.m., the Committee was adjourned.] 

(31) 

A P P E N D I X 

PREPARED STATEMENT OF TANYA FIDDLER, EXECUTIVE DIRECTOR, NATIVE CDFI 

NETWORK

First, I want to commend the Committee for convening a hearing to discuss how 

Native communities can access and take full advantage of the housing and community development programs administered by the United States Department of Agriculture (USDA) and I appreciate the opportunity to weigh in on behalf of NCN and 

our members. 

Background 

Let me start by providing some background. Community Development Financial 

Institutions (CDFIs) are private, mission driven financial institutions dedicated to 

providing financial products and services to underserved communities. The origin of 

Native CDFIs can be traced back to 1994 when Congress mandated, through the 

CDFI Fund’s authorizing statute, a study on the lending and investment practices 

in Native Communities. The Native American Lending Study (NALS), released in 

2001, revealed that Native American, Native Alaskan, and Native Hawaiian communities face unique challenges to economic growth. These obstacles include heightened barriers to accessing capital and basic financial services, as well as increased 

difficultly interacting with both private and public sector programs. With this in 

mind, the CDFI Fund created the Native Initiatives to further support the creation 

and expansion of Native CDFIs—CDFIs committed to empowering Native Communities and increasing access to credit, capital, and financial services. 

Since the launch of the Native Initiative the number of certified Native CDFIs 

has grown from seven to over seventy with additional organizations currently working through the certification process. These Native CDFIs are Native owned businesses, providing financial services and counselling, and expanding affordable housing opportunities that benefit Tribal communities. In FY 2015 alone, Native CDFIs 

originated $68 million in loans or investments that resulted in thousands of first 

time homeowners, jobs and businesses across the nation, and a culturally appropriate development model for increased success and sustainability. 

The Native CDFI Network was created in 2009 to be a unified voice and advocate 

for Native CDFIs and to promote strategies that empower Native Communities, expand access to capital, and build assets. As a co-founder of the Network, it was top 

priority to learn about the state and federal programs that supported community 

and economic development. We learned that Native set-aside money was getting 

turned back to the National pool due to low demand and in spite of our Tribes’ always being in pursuit of economic development dollars for their struggling communities. 

We pursued meetings with our state USDA Rural Development staff in South Dakota and Agency staff in DC to open up communication about how Native CDFIs 

were able to serve reservation communities and begin the development of a private 

sector economy. My first experience with USDA Rural Development programs was 

in 1997 as a Section 502 Packager working for a Native Housing Developer on my 

home reservation of Cheyenne River in North Central South Dakota. Working with 

that non-profit housing developer, I began to learn how to overcome barriers and 

challenges in accessing RD funding. With little or no private investment in our reservation community, it was critical to innovate and think outside of the box. To that 

end, we were able to couple Low Income Housing Tax Credits with Section 515 for 

a number of single family housing projects and rental housing projects. When I 

transitioned to run Four Bands Community Fund, a Native CDFI located on Cheyenne River as well, we had great success accessing what was then the Rural Business Enterprise Grant (RBEG) and Rural Business Opportunity Grant (RBOG) 

which provided capacity building for the new Native entrepreneurs we were assisting. The Cheyenne River Chamber of Commerce received support as well since it 

did workforce and sector development to support job creation. Four Bands eventually matured to apply for the Rural Microenterprise Assistance Program loan funds 

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and the Intermediary Relending Program for capitalization. They have deployed millions of dollars in loans for the housing and business development that is needed 

to grow an economy. 

While we celebrate the successes of our Native CDFIs and the great strides made 

over the last 15 years it is important to note that the barriers to capital that were 

identified in 2001 still exist in 2016. Native CDFIs have developed creative strategies for overcoming these barriers but it is important to recognize that Native Communities still face significant and unique challenges accessing capital. Last month, 

the CDFI Fund released a new report, Access to Capital and Credit in Native Communities, as a follow up to the 2001 NALS study. While the NALS focused on barriers, the new study focuses on change and opportunity and suggests successful 

strategies that Native Communities have used to overcome barriers and access capital and credit. 

The report recognizes the important role that Native CDFIs can play in building 

and sustaining Native Communities and ensure that community development efforts 

are in-line with and reflect the principles and value of the Native Community. The 

report recognizes that Native CDFIs can provide access to capital and credit for Native individuals who, prior to the development of a local CDFI, were unable to finance a home or a business or save for their education. 

One of the many lessons that I took away from my nearly twenty-years utilizing 

USDA funding, and is further underscored in the updated Access to Capital and 

Credit Report, was the transformational power of Native CDFI partnerships and our 

commitment to overcoming barriers that limit homeownership opportunities in Native communities, or suppress job creation and discourage entrepreneurship, or discourage saving and asset building. USDA Rural Development is an important partner for Indian country and I would like to suggest several ways that Native CDFIs 

and USDA can work together to increase investment in Native Communities. 

1. Promote the success of Native CDFI and USDA State partnerships that have 

expanded access to credit, skill-building and business development in order 

to create livable wage jobs in Native Communities and affordable homeownership opportunities. 

a. An example of a successful partnership is that between Mazaska Owecaso 

Otipi Financial, a Native Housing CDFI on the Pine Ridge Reservation 

that offers flexible loan products to support home ownership and rehabilitation for low- to moderate-income families. Opportunities for Native homeownership were few and far between before the Native CDFI began serving 

the community. Mazaska worked with South Dakota’s USDA Office to 

enter into a first of its kind, participation agreement to help expand the 

limited dollars available within both agencies and allow for the flexible underwriting that is required since most Native families are asset poor. They 

continued their partnership in a collaboration called the SD Native Homeownership Coalition and structured a capitalization pilot that would deploy 

Section 502 dollars to the Native CDFI in order to increase the dismally 

low numbers of this important low income resource. 

2. Work with National Partners like the Native CDFI Network to outreach and, 

promote the availability of funds and best practices for community and economic development in order to expand access to capital and uptake to critical 

programs, no longer losing Native set-aside dollars that are so challenging to 

get in the first place. 

a. In May 2016, the Native CDFI Network and the USDA Office in Washington partnered to provide a webinar regarding community facilities funding opportunities. Director Mensah and her staff were on the call to share 

the Agencies objectives in meeting the needs of rural Native communities. 

The Staff were exceptionally helpful in providing immediate technical assistance and guidance on the program. In a time when budgets are tight 

for all public and private entities, distance learning, webinars and other 

networking opportunities can deeply impact Native CDFIs operations and 

financing. 

3. Continue to reach out to Native CDFIs to provide education to policy makers 

and key stakeholders on specific barriers to economic development and asset 

building in Native communities in order to identify alternative strategies, 

programmatic or legislative, that will ensure an opportunity for safe and 

prosperous communities throughout our underserved communities. Native 

CDFIs will demonstrate the impact and sustainability of housing and community development when people have access to capital, training and technical assistance to accomplish their asset building goals. 

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I deeply appreciate the opportunity to provide input into the hearing record on 

behalf of the Native CDFI field, partners and Native communities. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN MCCAIN TO

LILLIAN SALERNO

Question. What is the status of the Navajo’s application for the Promise Zone designation? Are you familiar with the Bennett Freeze Area and would you agree that 

a Promise Zone designation could improve the housing and economic situation in the 

former Bennett Freeze area? 

Answer. Although the Navajo Nation did not receive a Promise Zone designation, 

they were a finalist in the last round and it is USDA Rural Development’s intent 

to find additional ways to assist the Navajo Nation. Rural Development staff have 

hosted ongoing discussions with the Navajo Nation and Navajo Technical University 

(the lead Promise Zone applicant on behalf of the Navajo Nation) to further 

prioritize and implement plans articulated in the PZ application. Discussions are 

well underway with the Navajo Nation, Navajo Tech and the Casey Family Foundation to host a Navajo Nation Promise Zone convening at Navajo Tech in late September. Additionally, work is under way between Rural Development, the Corporation for National and Community Service, the Navajo Nation and Navajo Tech to 

recruit and deploy an AmeriCorps/VISTA volunteer to serve as dedicated staff to assist the Navajo Nation navigate and compete for federal programs. 

Rural Development staff in Arizona and New Mexico are certainly aware of the 

infrastructure, housing and economic development challenges within the former 

Bennett Freeze area. RD Arizona has made a concerted effort to increase 504 home 

repair assistance (loans and grants) to homeowners in the Bennett Freeze area. 

Rural Development staff will continue to be responsive to the needs within the Bennett Freeze area as they are presented by the Navajo Nation and Navajo Tech— 

both within the Promise Zone framework and in ongoing project development. 

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