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80–227 PDF 2002

S. HRG. 107–498

INDIAN TRIBAL DEVELOPMENT CONSOLIDATION

FUNDING ACT

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

ON

S. 343

TO ESTABLISH A DEMONSTRATION PROJECT TO AUTHORIZE THE INTEGRATION AND COORDINATION OF FEDERAL FUNDING DEDICATED TO

COMMUNITY, BUSINESS, AND ECONOMIC DEVELOPMENT OF NATIVE

AMERICAN COMMUNITIES

MAY 8, 2002

WASHINGTON, DC

(
COMMITTEE ON INDIAN AFFAIRS

DANIEL K. INOUYE, Hawaii, Chairman

BEN NIGHTHORSE CAMPBELL, Colorado, Vice Chairman

FRANK MURKOWSKI, Alaska

JOHN McCAIN, Arizona,

PETE V. DOMENICI, New Mexico

CRAIG THOMAS, Wyoming

ORRIN G. HATCH, Utah

JAMES M. INHOFE, Oklahoma

KENT CONRAD, North Dakota

HARRY REID, Nevada

DANIEL K. AKAKA, Hawaii

PAUL WELLSTONE, Minnesota

BYRON L. DORGAN, North Dakota

TIM JOHNSON, South Dakota

MARIA CANTWELL, Washington

PATRICIA M. ZELL, Majority Staff Director/Chief Counsel

PAUL MOOREHEAD, Minority Staff Director/Chief Counsel

(II)
(III)

C O N T E N T S

Page

S. 343, text of ........................................................................................................... 3

Statements:

Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, vice chairman, Committee on Indian Affairs .............................................................. 1

DeLaCruz, James, council member, Quinault Indian Nation ....................... 32

Hall, Tex, president, National Congress of American Indians ..................... 25

Makil, Ivan, president, Salt River Pima-Maricopa Indian Community

Council ........................................................................................................... 27

McCaleb, Neal, assistant secretary, Indian Affairs, Department of the

Interior ........................................................................................................... 22

Spilde, Katherine A., senior research associate, Harvard Project on American Indian Economic Development, Kennedy School of Government ..... 38

APPENDIX

Prepared statements:

DeLaCruz, James ............................................................................................. 50

Hall, Tex ............................................................................................................ 45

Makil, Ivan ........................................................................................................ 46

McCaleb, Neal ................................................................................................... 43

Murkowski, Hon. Frank H., U.S. Senator from Alaska ................................ 43

Spilde, Katherine A. ......................................................................................... 48

Additional material submitted for the record:

Sovereignty and Nation-Building: The Development Challenge in Indian

Country Today: Stephen Cornell and Joseph P. Kalt (report) .................. 54

The Economist (articles) .................................................................................. 87

Public Papers of the Presidents of the United States: Richard Nixon,

1970 ................................................................................................................ 90

(1)

INDIAN TRIBAL DEVELOPMENT

CONSOLIDATION FUNDING ACT

WEDNESDAY, MAY 8, 2002

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

The committee met, pursuant to notice, at 10 a.m. in room 485,

Senate Russell Building, Hon. Ben Nighthorse Campbell (acting

chairman of the committee) presiding.

Present: Senator Campbell.

STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM COLORADO, VICE CHAIRMAN, COMMITTEE ON

INDIAN AFFAIRS

Senator CAMPBELL. Chairman Inouye is chairing another hearing

this morning, so we’ll proceed with this hearing. Welcome to the

Senate Committee on Indian Affairs hearing on S. 343, the Indian

Tribal Development Consolidated Funding Act of 2001, a bill that

I introduced along with Chairman Inouye in February 2001.

By now we’re all too familiar with the unfortunate economic conditions in Indian communities, a jobless rate of 45 percent, and 80

to 90 among some of the Plains economies. The poorest health in

the United States, with tuberculosis, diabetes, cancer almost in epidemic proportions. Substandard and crowded housing and an education system that traps Indian youngsters in hopelessness.

Despite some of the recent successes with Indian gaming, natural

resource development and other business opportunities, most tribes

still remain mired in Third World poverty.

There is a core group of conditions that any developing economy

needs, and these are what we have been focusing on at the Federal

level. One is solid physical infrastructure, two, a healthy, educated

work force, and three, financial capital. There is one ingredient we

can’t legislate and that’s tribal leadership. And I don’t just mean

someone who gets elected, I mean someone who is willing to work

and make his or her tribe attractive to both Indian entrepreneurs

and outside investors, and someone who is willing to do unpopular

but necessary things like reforming constitutions, insisting on independent judiciaries and making sure contracts and agreements are

honored by tribes even with changes in tribal administration.

In December 2001, the GAO published a report showing that of

the billions of dollars of Federal economic development assistance

for Indian tribes and Indians, much of it goes unused. In the

1980’s, Congress launched what became the highly successful In-
2

dian Tribal Self-Governance Act that grew out of intense Congressional dissatisfaction with the performance of the Indian agencies.

Congress decided that agency reforms were not going to take

place and that the only answer was to circumvent the agencies and

provide the funds directly to the tribes themselves. I think that it

is working. Generally, it’s working very well. I know we’ve heard

from many tribes who do their own contracting. They all seem to

think that’s the direction we should have been going all along. I’m

sure there’s enough blame to go around, I guess that’s why I introduced S. 343.

[Text of S. 343 follows:]
3

1

II

107TH CONGRESS

1ST SESSION S. 343

To establish a demonstration project to authorize the integration and coordination of Federal funding dedicated to the community, business, and

economic development of Native American communities.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 15, 2001

Mr. CAMPBELL (for himself and Mr. INOUYE) introduced the following bill;

which was read twice and referred to the Committee on Indian Affairs

A BILL

To establish a demonstration project to authorize the integration and coordination of Federal funding dedicated to

the community, business, and economic development of

Native American communities.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. TITLE.

4 The Act may be cited as the ‘‘Indian Tribal Develop5 ment Consolidated Funding Act of 2001’’.

6 SEC. 2. FINDINGS; PURPOSES.

7 (a) FINDINGS.—Congress makes the following find8 ings:
4

2

•S 343 IS

1 (1) A unique legal and political relationship ex2 ists between the United States and Indian tribes

3 that is reflected in article I, section 8, clause 3 of

4 the Constitution, various treaties, Federal statutes,

5 Supreme Court decisions, executive agreements, and

6 course of dealing.

7 (2) Despite the infusion of substantial Federal

8 dollars into Native American communities over sev9 eral decades, the majority of Native Americans re10 main mired in poverty, unemployment, and despair.

11 (3) The efforts of the United States to foster

12 community, economic, and business development in

13 Native American communities have been hampered

14 by fragmentation of authority, responsibility, and

15 performance, and by lack of timeliness and coordina16 tion in resources and decision-making.

17 (4) The effectiveness of Federal and tribal ef18 forts to generate employment opportunities and

19 bring value-added activities and economic growth to

20 Native American communities depends on coopera21 tive arrangements among the various Federal agen22 cies and Indian tribes.

23 (b) PURPOSES.—The purpose of this Act are to—
5

3

•S 343 IS

1 (1) enable Indian tribes and tribal organiza2 tions to use available Federal assistance more effec3 tively and efficiently;

4 (2) adapt and target such assistance more read5 ily to particular needs through wider use of projects

6 that are supported by more than 1 executive agency,

7 assistance program, or appropriation of the Federal

8 Government;

9 (3) encourage Federal-tribal arrangements

10 under which Indian tribes and tribal organizations

11 may more effectively and efficiently combine Federal

12 and tribal resources to support economic develop13 ment projects;

14 (4) promote the coordination of Native Amer15 ican economic programs to maximize the benefits of

16 these programs to encourage a more consolidated,

17 national policy for economic development; and

18 (5) establish a demonstration project to aid In19 dian tribes in obtaining Federal resources and in

20 more efficiently administering those resources for

21 the furtherance of tribal self-governance and self-de22 termination.

23 SEC. 3. DEFINITIONS.

24 In this Act:
6

4

•S 343 IS

1 (1) APPLICANT.—The term ‘‘applicant’’ means

2 an Indian tribe or tribal organization, or a consor3 tium of Indian tribes or tribal organizations, that

4 submits an application under this Act for assistance

5 for a community, economic, or business development

6 project, including a project designed to improve the

7 environment, housing facilities, community facilities,

8 business or industrial facilities, or transportation,

9 roads, or highways with respect to the Indian tribe,

10 tribal organization, or consortium.

11 (2) ASSISTANCE.—The term ‘‘assistance’’

12 means the transfer of anything of value for a public

13 purpose, support, or stimulation that is—

14 (A) authorized by a law of the United

15 States;

16 (B) provided by the Federal Government

17 through grant or contractual arrangements, in18 cluding technical assistance programs providing

19 assistance by loan, loan guarantee, or insur20 ance; and

21 (C) authorized to include an Indian tribe

22 or tribal organization, or a consortium of In23 dian tribes or tribal organizations, as eligible

24 for receipt of funds under a statutory or admin-
7

5

•S 343 IS

1 istrative formula for the purposes of commu2 nity, economic, or business development.

3 (3) ASSISTANCE PROGRAM.—The term ‘‘assist4 ance program’’ means any program of the Federal

5 Government that provides assistance for which In6 dian tribes or tribal organizations are eligible.

7 (4) INDIAN TRIBE.—The term ‘‘Indian tribe’’

8 has the meaning given such term in section 4(e) of

9 the Indian Self-Determination and Education Assist10 ance Act (25 U.S.C. 450b(e)).

11 (5) PROJECT.—The term ‘‘project’’ means an

12 undertaking that includes components that contrib13 ute materially to carrying out a purpose or closely14 related purposes that are proposed or approved for

15 assistance under more than 1 Federal Government

16 program.

17 (6) SECRETARY.—The term ‘‘Secretary’’ means

18 the Secretary of the Interior.

19 (7) TRIBAL ORGANIZATION.—The term ‘‘tribal

20 organization’’ has the meaning given such term in

21 section 4(l) of the Indian Self-Determination and

22 Education Assistance Act (25 U.S.C. 450b(l)).

23 SEC. 4. LEAD AGENCY.

24 The lead agency for purposes of carrying out this Act

25 shall be the Department of the Interior.
8

6

•S 343 IS

1 SEC. 5. SELECTION OF PARTICIPATING TRIBES.

2 (a) PARTICIPANTS.—

3 (1) IN GENERAL.—The Secretary may select

4 from the applicant pool described in subsection (b)

5 Indian tribes or tribal organizations, not to exceed

6 24 in each fiscal year, to submit an application to

7 carry out a project under this Act.

8 (2) CONSORTIA.—Two or more Indian tribes or

9 tribal organizations that are otherwise eligible to

10 participate in a program or activity to which this

11 Act applies may form a consortium to participate as

12 an applicant under paragraph (1).

13 (b) APPLICANT POOL.—The applicant pool described

14 in this subsection shall consist of each Indian tribe or trib15 al organization that—

16 (1) successfully completes the planning phase

17 described in subsection (c);

18 (2) has requested participation in a project

19 under this Act through a resolution or other official

20 action of the tribal governing body; and

21 (3) has demonstrated, for the 3 fiscal years im22 mediately preceding the fiscal year for which the re23 quested participation is being made, financial stabil24 ity and financial management capability as dem25 onstrated by the Indian tribe or tribal organization,

26 or each member of a consortium of tribes or tribal
9

7

•S 343 IS

1 organizations, having no material audit exceptions in

2 the required annual audit of the self-determination

3 contracts of the tribe or tribal organization.

4 (c) PLANNING PHASE.—Each applicant seeking to

5 participate in a project under this Act shall complete a

6 planning phase that shall include legal and budgetary re7 search and internal tribal government and organizational

8 preparation. The applicant shall be eligible for a grant

9 under this section to plan and negotiate participation in

10 a project under this Act.

11 SEC. 6. APPLICATION REQUIREMENTS, REVIEW, AND AP12 PROVAL.

13 (a) REQUIREMENTS.—Each applicant seeking to par14 ticipate in a project under this Act shall submit an appli15 cation to the head of the Federal executive agency respon16 sible for administering the primary Federal program to

17 be affected by the project that—

18 (1) identifies the programs to be integrated;

19 (2) is consistent with the purposes set forth in

20 section 2(b);

21 (3) describes a comprehensive strategy that

22 identifies the way in which Federal funds are to be

23 integrated and delivered under the project and the

24 results expected from the project;
10

8

•S 343 IS

1 (4) identifies the projected expenditures under

2 the project in a single budget;

3 (5) identifies the agency or agencies of the trib4 al government that are to be involved in the imple5 mentation of the project;

6 (6) identifies any Federal statutory provisions,

7 regulations, policies, or procedures that the appli8 cant believes need to be waived in order to imple9 ment the project; and

10 (7) is approved by the governing body of the

11 applicant, including in the case of an applicant that

12 is a consortium or tribes or tribal organizations, the

13 governing body of each affected member tribe or

14 tribal organization.

15 (b) REVIEW.—Upon receipt of an application that

16 meets the requirements of subsection (a), the head of the

17 Federal executive agency receiving the application shall—

18 (1) consult with the head of each Federal exec19 utive agency that is proposed to provide funds to im20 plement the project and with the applicant submit21 ting the application; and

22 (2) consult and coordinate with the Department

23 of the Interior as the lead agency under this Act for

24 the purposes of processing the application.

25 (c) APPROVAL.—
11

9

•S 343 IS

1 (1) WAIVERS.—

2 (A) IN GENERAL.—With respect to any

3 Federal statutory provisions, regulations, poli4 cies, or procedures that the applicant believes

5 need to be waived in order to implement the

6 project that are identified in the application in

7 accordance with subsection (a)(6) or as a result

8 of the consultation required under subsection

9 (b), the head of the Federal executive agency

10 responsible for administering such provision,

11 regulation, policy, or procedure shall, subject to

12 subparagraph (B), waive the requirement so

13 identified, notwithstanding any other provision

14 of law.

15 (B) LIMITATION.—A statutory provision,

16 regulation, policy, or procedure identified for

17 waiver under subparagraph (A) may not be

18 waived by the head of the Federal executive

19 agency responsible for administering the provi20 sion, regulation, policy, or procedure if such

21 head determines that a waiver would be incon22 sistent with—

23 (i) the purposes set forth in section

24 2(b); or
12

10

•S 343 IS

1 (ii) the provisions of the statute from

2 which the program involved derives its au3 thority that are specifically applicable to

4 Indian programs.

5 (2) PROJECT.—Not later than 90 days after

6 the receipt of an application that meets the require7 ments of subsection (a), the head of the Federal ex8 ecutive agency receiving the application shall inform

9 the applicant submitting the application, in writing,

10 of the approval or disapproval of the application, in11 cluding the approval or disapproval of a waiver

12 sought in accordance with paragraph (1). If an ap13 plication or a waiver is disapproved, the written no14 tice shall identify the reasons for the disapproval

15 and the applicant submitting the application shall be

16 given an opportunity to amend the application or to

17 petition the head of the Federal executive agency

18 sending the notice to reconsider the disapproval of

19 the application or the waiver.

20 SEC. 7. AUTHORITY OF HEADS OF FEDERAL EXECUTIVE

21 AGENCIES.

22 (a) IN GENERAL.—The President, acting through the

23 heads of the appropriate Federal executive agencies, shall

24 promulgate regulations necessary to carry out this Act and
13

11

•S 343 IS

1 to ensure that this Act is applied and implemented by all

2 Federal executive agencies.

3 (b) SCOPE OF COVERAGE.—The Federal executive

4 agencies that are included within the scope of this Act

5 shall include—

6 (1) the Department of Agriculture;

7 (2) the Department of Commerce;

8 (3) the Department of Defense;

9 (4) the Department of Education;

10 (5) the Department of Energy;

11 (6) the Department of Health and Human

12 Services;

13 (7) the Department of Housing and Urban De14 velopment;

15 (8) the Department of the Interior;

16 (9) the Department of Justice;

17 (10) the Department of Labor;

18 (11) the Department of Transportation;

19 (12) the Department of the Treasury;

20 (13) the Department of Veterans Affairs;

21 (14) the Environmental Protection Agency; and

22 (15) the Small Business Administration.

23 (c) ACTIVITIES.—Notwithstanding any other provi24 sion of law, the head of each Federal executive agency,
14

12

•S 343 IS

1 acting alone or jointly through an agreement with another

2 Federal executive agency, may—

3 (1) identify related Federal programs that are

4 likely to be particularly suitable in providing for the

5 joint financing of specific kinds of projects with re6 spect to Indian tribes or tribal organizations;

7 (2) assist in planning and developing such

8 projects to be financed through different Federal

9 programs;

10 (3) with respect to Federal programs or

11 projects that are identified or developed under para12 graphs (1) or (2), develop and prescribe—

13 (A) guidelines;

14 (B) model or illustrative projects;

15 (C) joint or common application forms;

16 and

17 (D) other materials or guidance;

18 (4) review administrative program requirements

19 to identify those requirements that may impede the

20 joint financing of such projects and modify such re21 quirements when appropriate;

22 (5) establish common technical and administra23 tive regulations for related Federal programs to as24 sist in providing joint financing to support a specific

25 project or class of projects; and
15

13

•S 343 IS

1 (6) establish joint or common application proc2 essing and project supervision procedures, including

3 procedures for designating—

4 (A) an agency responsible for processing

5 applications; and

6 (B) a managing agency responsible for

7 project supervision.

8 (d) REQUIREMENTS.—In carrying out this Act, the

9 head of each Federal executive agency shall—

10 (1) take all appropriate actions to carry out this

11 Act when administering a Federal assistance pro12 gram; and

13 (2) consult and cooperate with the heads of

14 other Federal executive agencies to carry out this

15 Act in assisting in the administration of Federal as16 sistance programs of other Federal executive agen17 cies that may be used to jointly finance projects un18 dertaken by Indian tribes or tribal organizations.

19 SEC. 8. PROCEDURES FOR PROCESSING REQUESTS FOR

20 JOINT FINANCING.

21 In processing an application or request for assistance

22 for a project to be financed in accordance with this Act

23 by at least 2 assistance programs, the head of a Federal

24 executive agency shall take all appropriate actions to en25 sure that—
16

14

•S 343 IS

1 (1) required reviews and approvals are handled

2 expeditiously;

3 (2) complete account is taken of special consid4 erations of timing that are made known to the head

5 of the Federal agency involved by the applicant that

6 would affect the feasibility of a jointly financed

7 project;

8 (3) an applicant is required to deal with a mini9 mum number of representatives of the Federal Gov10 ernment;

11 (4) an applicant is promptly informed of a deci12 sion or special problem that could affect the feasibil13 ity of providing joint assistance under the applica14 tion; and

15 (5) an applicant is not required to get informa16 tion or assurances from 1 Federal executive agency

17 for a requesting Federal executive agency when the

18 requesting agency makes the information or assur19 ances directly.

20 SEC. 9. UNIFORM ADMINISTRATIVE PROCEDURES.

21 (a) IN GENERAL.—To make participation in a project

22 simpler than would otherwise be possible because of the

23 application of varying or conflicting technical or adminis24 trative regulations or procedures that are not specifically

25 required by the statute that authorizes the Federal pro-
17

15

•S 343 IS

1 gram under which such project is funded, the head of a

2 Federal executive agency may promulgate uniform regula3 tions concerning inconsistent or conflicting requirements

4 with respect to—

5 (1) the financial administration of the project

6 including with respect to accounting, reporting, and

7 auditing, and maintaining a separate bank account,

8 to the extent consistent with this Act;

9 (2) the timing of payments by the Federal Gov10 ernment for the project when 1 payment schedule or

11 a combined payment schedule is to be established for

12 the project;

13 (3) the provision of assistance by grant rather

14 than procurement contract; and

15 (4) the accountability for, or the disposition of,

16 records, property, or structures acquired or con17 structed with assistance from the Federal Govern18 ment under the project.

19 (b) REVIEW.—In making the processing of applica20 tions for assistance under a project simpler under this Act,

21 the head of a Federal executive agency may provide for

22 review of proposals for a project by a single panel, board,

23 or committee where reviews by separate panels, boards,

24 or committees are not specifically required by the statute
18

16

•S 343 IS

1 that authorizes the Federal program under which the

2 project is funded.

3 SEC. 10. DELEGATION OF SUPERVISION OF ASSISTANCE.

4 Pursuant to regulations established to implement this

5 Act, the head of a Federal executive agency may delegate

6 or otherwise enter into an arrangement to have another

7 Federal executive agency carry out or supervise a project

8 or class of projects jointly financed in accordance with this

9 Act. Such a delegation—

10 (1) shall be made under conditions ensuring

11 that the duties and powers delegated are exercised

12 consistent with Federal law; and

13 (2) may not be made in a manner that relieves

14 the head of a Federal executive agency of respon15 sibility for the proper and efficient management of

16 a project for which the agency provides assistance.

17 SEC. 11. JOINT ASSISTANCE FUNDS AND PROJECT FACILI18 TATION.

19 (a) JOINT ASSISTANCE FUND.—In providing support

20 for a project in accordance with this Act, the head of a

21 Federal executive agency may provide for the establish22 ment by the applicant of a joint assistance fund to ensure

23 that amounts received from more than 1 Federal assist24 ance program or appropriation are more effectively admin25 istered.
19

17

•S 343 IS

1 (b) AGREEMENT.—A joint assistance fund may only

2 be established under subsection (a) in accordance with an

3 agreement by the Federal executive agencies involved con4 cerning the responsibilities of each such agency. Such an

5 agreement shall—

6 (1) ensure the availability of necessary informa7 tion to the executive agencies and Congress; and

8 (2) provide that the agency administering the

9 fund is responsible and accountable by program and

10 appropriation for the amounts provided for the pur11 poses of each account in the fund.

12 (c) USE OF EXCESS FUNDS.—In any demonstration

13 project conducted under this Act under which a joint as14 sistance fund has been established under subsection (a)

15 and the actual costs of the project are less than the esti16 mated costs, use of the resulting excess funds shall be de17 termined by the head of the Federal executive agency ad18 ministering the joint assistance fund, after consultation

19 with the applicant.

20 SEC. 12. FINANCIAL MANAGEMENT, ACCOUNTABILITY, AND

21 AUDITS.

22 (a) SINGLE AUDIT ACT.—Recipients of funding pro23 vided in accordance with this Act shall be subject to the

24 provisions of chapter 75 of title 31, United States Code.
20

18

•S 343 IS

1 (b) RECORDS.—With respect to each project financed

2 through an account in a joint management fund estab3 lished under section 11, the recipient of amounts from the

4 fund shall maintain records as required by the head of

5 the Federal executive agency responsible for administering

6 the fund. Such records shall include—

7 (1) the amount and disposition by the recipient

8 of assistance received under each Federal assistance

9 program and appropriation;

10 (2) the total cost of the project for which such

11 assistance was given or used;

12 (3) that part of the cost of the project provided

13 from other sources; and

14 (4) other records that will make it easier to

15 conduct an audit of the project.

16 (c) AVAILABILITY.—Records of a recipient related to

17 an amount received from a joint management fund under

18 this Act shall be made available to the head of the Federal

19 executive agency responsible for administering the fund

20 and the Comptroller General for inspection and audit.

21 SEC. 13. TECHNICAL ASSISTANCE AND PERSONNEL TRAIN22 ING.

23 Amounts available for technical assistance and per24 sonnel training under any Federal assistance program

25 shall be available for technical assistance and training
21

19

•S 343 IS

1 under a project approved for joint financing under this

2 Act where a portion of such financing involves such Fed3 eral assistance program and another assistance program.

4 SEC. 14. JOINT STATE FINANCING FOR FEDERAL-TRIBAL

5 ASSISTED PROJECTS.

6 Under regulations promulgated under this Act, the

7 head of a Federal executive agency may enter into an

8 agreement with a State to extend the benefits of this Act

9 to a project that involves assistance from at least 1 Fed10 eral executive agency, the State, and at least 1 tribal agen11 cy or instrumentality. The agreement may include ar12 rangements to process requests or administer assistance

13 on a joint basis.

14 SEC. 15. REPORT TO CONGRESS.

15 Not later than 1 year after the date of enactment

16 of this Act, the President shall prepare and submit to Con17 gress a report concerning the actions taken under this Act

18 together with recommendations for the continuation of

19 this Act or proposed amendments thereto. Such report

20 shall include a detailed evaluation of the operation of this

21 Act, including information on the benefits and costs of

22 jointly financed projects that accrue to participating In23 dian tribes and tribal organizations.

Æ
22

Senator CAMPBELL. We’re going to try with this bill to make

some changes in the way the Federal economic development assistance to Indian tribes is handled. S. 343 is modeled after the Tribal

Self-Governance Act and would provide economic development

funds directly to the tribes. The Indian Tribal Development Consolidated Funding Act of 2002 authorizes a pilot program for up to

24 Indian tribes to participate in projects to foster community, economic and business development in their communities.

In addition to block granting economic development funds to

tribes, this bill creates a clearinghouse of Federal Indian programs

for information that will ensure that tribes take advantage of all

Federal agency programs with little or no cost to the Government.

My intention is to work with the Administration to produce an

agreement on this bill or something that looks similar to it in this

session of Congress, even though we don’t have an awful lot of

time. If we can’t reach an agreement this session, then I will reintroduce this bill again next year.

With that, I would introduce into the record two articles, one

from the Economist and a copy of the GAO report dealing with Indian affairs.

[Information appears in appendix.]

Senator CAMPBELL. With that, we’ll start with Neal McCaleb. If

you’d like to just come on up and sit down, Neal, and Aurene, if

you have something to say with this too, please come up here and

sit with him. Nice to have you here, Neal.

STATEMENT OF NEAL MCCALEB, ASSISTANT SECRETARY OF

INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR

Mr. MCCALEB. Thank you very much, Mr. Chairman. It’s a pleasure to be here.

Senator CAMPBELL. All your written testimony will be included

in the record.

Mr. MCCALEB. All right. I may just do that, rather than read it

into the record.

First of all, I want to make it clear that we’re absolutely in support of both the concept and the letter of the bill, because it, I

think, builds on some things that we’ve already accomplished in

this consolidation and integration of Federal programs, due to single agency oversight to deal with Indian interests. We’ve seen the

success of the legislation, Public Law 102–477, which integrated

the training programs and the education programs. That’s been

very successful, it’s been very enthusiastically endorsed by the

tribes and this is very similar.

We think there’s a lot to be accomplished by the integration of

these different programs. Right now we have these programs scattered across many different departments and agencies. The tribes

have to make applications individually to these agencies. Then they

have to have a report of financial accountability. This provides a

streamlining so that they can make one application, and there’s a

bill that provides it through the Department of the Interior. It’s coordinated for all different agencies. I think there’s a lot of synergism and efficiency associated with the bill.

There are some tweaks, I think, that some different departments

are giving some different information to us, the Administration,
23

they have some suggestions or tweaks to the bill. I’m sure that

we’ll visit with the committee about that at a later date. But the

bill substantially is enthusiastically endorsed by the Administration. And I think with that, I’ll just answer any questions.

[Prepared statement of Mr. McCaleb appears in appendix.]

Senator CAMPBELL. Well, thank you. I appreciate that. It’s rare

that we get a bill that’s enthusiastically endorsed by anybody. It’s

kind of nice. And whatever those tweaks are, if you would have

Aurene or somebody get together with the staff and Senator

Inouye’s staff, we’ll try and—— Mr. MCCALEB. And it’s mentioned in the formal testimony.

Senator CAMPBELL. I see. Good.

Conceptually, you think that it is time to extend self-governance

to other areas like economic development, as this bill would do?

Mr. MCCALEB. Absolutely. As you indicated earlier, the self-governance legislation that was passed early in the last decade has

been very successful, we may have 220 tribes that are contracting

or compacting for their own self-governance, which amounts really

to a block grant to tribes. That is a concept that’s available in this

bill and I think it will expand to other tribes under this bill. I think

it will expand the concept of self-governance.

Senator CAMPBELL. In the past, whenever we have talked about

self-governance, although I think the concept is becoming more acceptable now and a little easier to deal with with tribes, I can remember years ago when we would talk about it, there was always

a worry that, is self-governance code for taking away the trust responsibility that we are obligated to provide and that tribes have

a right to expect. But I don’t seem to hear that quite as much now.

Maybe I would ask you, how do we encourage tribes to expand

self-governance? One of the other things that we hear, Neal, as you

know, is that new tribes come in after we’ve put something in

place, and it may be in place for 1 year or more, and people come

in all the time and say, we didn’t know about it. So there seems

to be a vehicle of disconnect somewhere, by the time we put something in place, that they know they actually have available to

them.

Mr. MCCALEB. Well, I think in Indian country, there’s a general

awareness of the opportunity of self-governance. Many tribes

choose to continue and not be self-governance, but contract under

638 for a variety of programs. And then some tribes prefer to be

direct service tribes, where the BIA provides all these services. And

part of self-governance is letting tribes make their own decisions.

That’s happening, and I think that’s probably good.

I think there’s a general awareness, you’re right, though, that

initially there was a lot of reserve about self-governance. I was

privileged in 1983 to be a member of President Reagan’s Commission on Indian Reservation Economies. One of the recommendations that we made is very similar to what we’ve done in self-governance, and that is to take the money that is ascribed to the tribes

in a variety of programs and just divert it directly, or not divert

it, but transmit it directly to the tribes in the form of a block grant.

That’s essentially what self-governance is. When we made that recommendation in that commission report, it was roundly repudiated

in Indian country.
24

So there is a kind of an educational process, a learning curve, if

you please. We had a surge in self-governance when it started

about in the 1995, 1996 through 1998 era, when it picked up. It’s

finally leveled off, but we’re continuing to add self-governance

tribes each year.

Senator CAMPBELL. From the time you were on that commission

and you had considerable experience in Oklahoma before you came

to the Federal Government, and the time you’ve been in your

present position, have you noticed any correlation between self-governance and the economic success of tribes that have participated

in self-governance?

Mr. MCCALEB. Yes; I think so.

Senator CAMPBELL. Can you say that the ones who have used it

more have raised their standard of living for their people?

Mr. MCCALEB. I think so. The Harvard Project people have made

the point that one of the real seed beds of economic growth is a stable, functioning, true self-governing tribe that has a strong tribal

government. This process of self-governance would simply strengthen those aspects, both from the legislative and the administrative

standpoint within the tribe that is conducive to strengthening those

institutions within the tribal government that provides stability

and would provide a good environment or a good seed bed for economic growth and economic development.

Senator CAMPBELL. Thank you. In fact, someone from the Harvard Project is going to be testifying a little later. Maybe they can

inform and enlighten us a little bit more about that.

Those are the only questions I have, Neal. Did Senator Inouye

have anything he wanted me to ask?

There may be some written questions from other members of the

Committee, but we’ll be looking forward to working with you in the

next few weeks, if you can, on this bill. Hopefully we’ll be able to

get the thing through this year, if it meets with the approval of the

tribes.

Mr. MCCALEB. I’ll look forward to it, sir. Thank you for the privilege of being here today.

Senator CAMPBELL. Thank you very much.

Our next witness panel is Tex Hall, president of the National

Congress of American Indians; Ivan Makil, president of the Salt

River Pima-Maricopa Indian Community Council; and James

DeLaCruz, council member of the Quinault Indian Nation.

We might say before we take testimony, James, I knew your dad

well, he was a wonderful friend and great Indian leader. Like many

other people in America, we were just terribly distressed when he

unfortunately passed away. I was in an airport at the time, and

had just bumped into another friend, a mutual friend between your

dad and me. He’s the one that actually told me about it. I want

you to know that our hearts really went out to your family.

Mr. DELACRUZ. I appreciate that.

Senator CAMPBELL. And Ivan, I’m sorry I didn’t see you when

you came in, or I would have come over and said hello. We’ve been

friends for so long.

Tex, nice to have you here. We’ll start with you. I might tell you

that—did you see that thing on a web site where you and I supposedly had some huge disagreement on a Friday in a committee
25

hearing here which we have never had? We don’t do committee

hearings on Friday. It was not very complimentary about me or

you. We’re thinking about responding to that, it was so bad. It was

fabricated.

Mr. HALL. No; I didn’t bother to look at it, based on what some

of the folks had told me, that it was negative and it was pitting

us against each other, and a derogatory remark. That is completely

a fabrication.

Senator CAMPBELL. Totally false. We’ve been friends ever since

we’ve known each other. I didn’t know about it either until I got

a call from the president of the Northern Cheyenne, where I’m enrolled. They were very upset with it. They said, did you see this?

I said no, and they said they thought they were going to respond

to that, too, because it was so bad.

Mr. HALL. I got the same call from your tribe. I think it’s important that we do. At least I will, Mr. Chairman.

Senator CAMPBELL. Thank you. Go ahead and proceed. And to all

of you, your written testimony will be included in the record.

STATEMENT OF TEX HALL, PRESIDENT, NATIONAL CONGRESS

OF AMERICAN INDIANS

Mr. HALL. Thank you, Mr. Chairman and members of the committee. I appreciate the opportunity to present on S. 343 today.

Just a little background, we at NCAI, National Congress of

American Indians, are really supportive of the concept of this bill.

We’ve been working with Neil McCaleb, the Assistant Secretary for

Indian Affairs, working on an overall economic development focus.

Matter of fact, NCAI is meeting in Bismarck on June 16–19 and

the whole conference is focused on economic development. So this

bill is a great start, we think, toward putting some of those tracks

down.

Finally, we’re looking toward even a White House initiative later

on this fall. I think we even set the date, it’s September 18 through

20. So obviously we want to work with the Committee as we move

this forward. This bill is an example of the 477 program, which of

course has been very successful in Indian country. It’s like a one

stop shop.

The bureaucracy, I think, in line with your comments earlier,

Mr. Chairman, about why some tribes don’t, I think the bureaucracy discourages many tribes from developing their applications.

And the one stop shop, especially if we can add that onto the portion of the bill that talks about the waiver of the provisions, the

only thing I see now is what happens if the Federal agency does

not want to waive its provisions. We’ve seen that in the bureaucracy, and some agencies are very willing to look at waiving certain

red tape and regulations and others are not. So I think we need

to have some sort of strength in the bill that says what happens

if an agency does not want to waive.

Those were just my general points. We have submitted our written testimony, Mr. Chairman, and just briefly in my verbal testimony, we definitely want to support this bill, again, not only for

NCAI but for my tribe at the Fort Berthhold Reservation in North

Dakota.
26

At the BIA, we have a subcommittee on economic development.

This really lays the groundwork for one of our recommendations for

consolidation of Federal agencies. So we’re really in line with that.

I do have a concern on the number of applicants. The bill says

24, Mr. Chairman. I’m wondering if we couldn’t increase that. Because one of our concepts as we’re working for this national economic effort is that the World Bank, the World Bank has a goal

in 15 years to reduce poverty by 50 percent. That’s an aggressive

goal, but I think it’s a very worthwhile goal. I think it’s something

we should look at in Indian country and with the United States

Congress, is a similar goal to reduce the 50 percent national unemployment in one-half by 15 years. That would reduce us down to

25 percent. But I think we need to even look at doubling the 24

tribes to 50.

The second point I want to raise is that the criteria for eligibility

for the demonstration project, again, there’s going to be tribes, as

you mentioned, Mr. Chairman, in self-governance, that are very capable. And I think we somehow have to think of those tribes that

are the have-nots, those tribes that need the technical assistance,

that probably need the funds the most. Somehow we need to think

of criteria that doesn’t eliminate those tribes. So I would strongly

advocate that we look at some language to help those tribes that

don’t, I mean, the criteria doesn’t exclude them, maybe is a better

way for me to put that.

Another point, a recommendation, Mr. Chairman, is that we believe that all Federal agencies should be required to create a catalog of programs for provisions. Right now the bill has language that

says may, and we strongly support that provision of the bill, but

I think it should require.

So that’s just some technical stuff. I think again that that would

really be beneficial, to mandate the Federal agencies to comply.

Also another recommendation is for legal reasons, if an agency

does not want to comply, is there any oversight provision that could

be provided here? Because I think it says after one year, the President shall do a report to Congress. That might be a little bit long.

I’m just thinking of some sort of technical amendment that would

require some sort of oversight. Again, some Federal agencies are

very cooperative and very much want to do economic development.

Others are not.

So if an agency does not, and they’re saying, well, for these legal

reasons, we don’t want to waive any sort of regulation provisions

or the criteria, or they’re just not cooperating, I think there could

be some sort of a technical amendment or some sort of oversight

that could spur them on to comply with working with a tribe. Because as we know, in Indian country, Mr. Chairman, and you know

yourself, that if we’re working on a housing project or a lagoon

project, we may have five Federal agencies working on that single

lagoon project for housing development for a tribe, with five different bureaucracies and five different regulations and five different sets of funds.

Senator CAMPBELL. Who don’t talk to each other much.

Mr. HALL. And we don’t talk to each other very much. So again,

the concept for this is a wonderful concept. We just think that’s it’s

very important that we move forward on this.
27

Just in line with your point about why some tribes aren’t either

using self-governance or using the legislation that is passed by

Congress, you know, that’s a difficult—and I was listening to your

question on it, that’s a very valid question. I think the bureaucracy

sometimes affects tribes from even wanting to apply, because they

know they’re going to jump through many hoops. We just gave the

example of one project, a lagoon project, using five Federal agencies.

So I think if we can, once the bill hopefully passes and everything, with all the amendments from Indian country, and it goes

forward, which I hope it does, we somehow, with NCAI and with

the Department of Interior, we need to really market this. Because

I think this is a wonderful opportunity. Obviously we will do that

at the NCAI conference in June and we will do that at the summit

later on in September. We will do our part to really market this

bill, so that tribes are aware.

But again, the criteria might scare some tribes. We’ve really got

to look at that criteria so it doesn’t exclude those tribes that need

it the most. So that really does it for the gist of our comments, Mr.

Chairman. I’d be happy to answer any questions later on.

[Prepared statement of Mr. Hall appears in appendix.]

Senator CAMPBELL. I appreciate it. I might mention that I’m not

wedded to the 24, by the way, we just picked 24 because it’s 2 in

each of the BIA areas. I thought that would make a nice, round

number, but it certainly could be more. As you know, we do these

things in two steps, the first one is a concept bill like this that sets

up a demonstration project, and if we get some information back

and it sounds good and if everybody’s happy with it, then we move

forward with the bill to expand it. That’s probably the way this will

be done, too, if the thing works out, why then we’ll try to make it

bigger. But the number 24 certainly can be changed if tribes think

that it should be.

Why don’t you go ahead, Ivan.

STATEMENT OF IVAN MAKIL, PRESIDENT, SALT RIVER PIMAMARICOPA INDIAN COMMUNITY COUNCIL

Mr. MAKIL. Thank you, Senator Campbell, and other committee

members. I really appreciate the time and especially the efforts in

terms of this bill. It’s really good to see, refreshing to see that we’re

finally beginning to see some creativity in how we draft legislation

that benefits tribes.

This is really important, particular to us at Salt River. Part of

what I’m going to share with you today is just some experiences

that we’ve had at Salt River to sort of explain how I think this program can be beneficial to other tribes, and had this program been

in place years ago for us, I think we would have been much further

along, as I think it will benefit other tribes in the future.

Originally, Salt River was in an area where our ancestors made

and developed an economy out of a river, Salt River, which the

tribe was named after. But the Federal Government some time

back dammed up that river and basically cut off the life blood of

the community. We were primarily an agricultural tribe. So the agriculture pretty much went away without water.
28

So that forced us to look at what alternatives we might have. At

that time, we were quite a ways out from the Phoenix metropolitan

area. Fifty years later, all of a sudden, the metropolitan area has

started growing up to our boundaries. And as it grew up to our

boundaries, it forced us to start looking at how we start to adapt

to this more contemporary society and ways of generating revenue

so that we could take care of our people. Not only take care of our

people, but provide the kinds of housing, health care, etc., that was

necessary for all communities.

And I guess you’ll see some of the slides that we have here that

will show you and emphasize some of the things we’re talking

about. One of the things that we’ve been fortunate about is that we

have realized that the decisions we make today are going to be

really effective, affecting people in the next generation. They don’t

affect us directly today, but we know that what we do today is

going to impact us. That concept of understanding how we create

communities and make decisions for the next seven generations is

really critical to all tribes. It puts us in a position so that we make

better decisions.

We’re one of the, as Mr. McCaleb had mentioned, we’re one of

the 220 tribes that are a self-governance tribe. But we started in

self-governance actually before self-governance became popular.

Back in the Nixon era, when President Nixon first launched the

self-determination efforts in 1970, Salt River contracted for its first

program, before Public Law 93–638 was in effect. In 1970, we contacted for a police department.

What that started allowing us to do was to start utilizing the

revenue and understanding how, by supplementing it with our own

resources, managing it ourselves, that we could create a better department. Today, that experience brought us down the road to

where we contract for almost all the services. So when we made the

conversion to self-governance, it was a real simple process.

But I guess that experience and one of those main principles that

are contained in your bill, S. 343, that authorizes that kind of expansion of this program, really is, I guess, sort of the next step for

all tribes, especially for those that have never had the opportunity

to do self-governance.

But it’s important that the funding to the community, the businesses and economic development is highlighted. Because it continues to be the foundation of what we consider both a systematic and

a holistic approach. This systematic and holistic approach is really

critical, because the systematic approach deals with functionality

and efficiency. The holistic side of this effort really is consistent

with how tribes do things anyway, how tribes think. So it gets to

the cultural base of tribes.

And it’s important, as we move along and as tribes are growing,

that we continue to bring these two portions together. Because

without that, as was mentioned earlier, you have one agency doing

one thing, trying to deal with something in health care or housing,

and you have another that may be dealing with economic development. But for instance, infrastructure, whether it’s through housing or some sort of economic development project, ought to be coordinated. The best people to do that are the tribes themselves.
29

In the 1980’s, Salt River first developed a shopping center. We

were one of the first tribes to ever develop a shopping center of our

size. And part of what that did was, we were able to do that because we had contracted for some of the services, particularly realty. What that did was it put us in control of that process. Public

Law 93–638 gave us a process that allowed us to change and to

manage more realistically the development process that was important.

That development process was a very cumbersome process. We

learned a lot of things over time. On the screen what you see is

an example of our lease process. The yellow is the highlighted area

of our process. I know it’s difficult to see. But it talks about all of

the various due diligence, the requirements of land issues, especially when you deal with a lot of land issues, that we had to develop over time. This is the process that we use today.

So you see the involvement of the BIA, which is very minimal,

those are where the trust responsibilities of the Bureau are still

maintained.

Senator CAMPBELL. The green?

Mr. MAKIL. It’s the green. The BIA is in the green.

On the next slide, if you compare this process, most tribes deal

with this process or a similar process, where they have to get approval from the Bureau. You see all of the green here, versus the

decisions that they really are in a position to make in the yellow.

That is so important, and that process is so important to creating

a foundation for revenue, so important for making decisions about

what tribes can live with in terms of growth and development. Because if we can’t control growth and development and how we

grow, from health care to housing to economic development to infrastructure, then we will never meet the needs of our community.

Because we have taken control of those resources and been able

to establish this process, one of the things we’ve also been able to

do in this process is create a data base of our land records. This

sort of ties into the overall issues of how you manage trust lands

and trust funds. Because part of what we’ve done in this process

is because we had to have a system that helped us to understand

ownership of those lands.

This is a map of our community. With our system that we’ve developed, because we had to develop it for development purposes, we

can go in and a landowner can come in and say, I have my allotment, here’s my allotment, and we can break it down to each section. Then we can break it down even further, so that any landowner that walks in our realty office can walk out with a description of their land, the amount of interest they own in their land,

no mater how severely fractionated, and we can even show them

exactly where their land is on a map.

Now, we’ve been able to do this because we’ve been able to manage these resources in a self-governance type of way. That’s something that I think you won’t find hardly anywhere in the country.

Ten years ago, the community developed what we call a vision

statement that would guide our community. What was important

in that process is that it wasn’t a process of individuals or of consultants or of even the council. It was a product of the whole community. The idea came from the administration and the council.
30

But we had a series of public hearings where we brought in tribal

members and we talked about housing, we talked about health

care, we talked about development and the future growth of our

community, what did we want to see our community look like.

Through this public hearing process, it brought in and created

ownership in this vision of our future, by the individual members.

So that it wasn’t an issue of tribal lands versus allotted lands, it

was an issue where we were able to bring all of the parties together and have some agreement in general. Obviously, not everybody agrees. But in general, there was a significant amount of

agreement and support in this way.

This is where, by having control of those various services and

being able to manage them internally, that although there’s always

a concern by the Bureau that there’s a trust responsibility and that

trust responsibility goes to individual allottees, that we’ve been

able, because it’s been important to bring this cohesiveness of community together, that the tribal members participate in this process.

So when we talk about, and I think Tex brought up a really good

point, we have concerns about it, too, in terms of waiving certain

regulations. Too often, tribal governments are looked at as, well,

we don’t look out for the interest of the allottees. But the allottees

are our constituents. Things only work if the allottees support what

we’re trying to do in terms of tribal government.

So as long as we bring them into this process and we make them

a part of the process, and they are a part of this process, then they

have ownership in the vision of the future. That ownership in the

vision of the future is what can come about when you can wrap

your arms around all of these resources that are available to you.

All of these Federal agencies have resources that tribes need.

From our experience, I have no doubt that the creation of this

bill was an extremely great idea. You sort of liken it to a fund

where you can leverage other opportunities and you don’t waste

dollars. You get the biggest bang for your buck, so to speak, because you don’t have duplication and you can avoid that kind of duplication.

In this process, we were fortunate because we were forced to develop the kind of expertise internally. Our experience, and I personally have talked to a lot of tribes around the country about development and some of the things that we’ve been doing, we’ve

been invited several times to share not only the things we’ve done

in economic development but also the things we’ve done with, as

you saw earlier, the management process of realty. We’ve been

asked to share that program with other tribes.

That was an evolutionary process. It didn’t happen overnight. It

happened starting in 1970 when we contracted for the first program. With the principles that are laid out in S. 343, what you’re

doing is you’re giving tribes the opportunity to start to develop that

expertise. Because when they have the opportunity to start managing those resources, they also have to start developing the expertise. Or one of the things that we think that maybe should be considered in this demonstration project is, if the tribes do not have

expertise, is making sure that within the bill there’s the oppor-
31

tunity to gain that expertise or hire that expertise. That’s really

critical.

Because one of the things that we’ve found as we’ve created enterprises, we now own and operate nine different enterprises, everything from a sand and gravel operation to a golf course that’s

one of the top 100 in the country, we own a cement plant in northern Arizona that’s not even on our land, on tribal land, it’s on land

that we purchased. But all of these opportunities came about because we hired the expertise and we learned from that expertise.

I realize that time is running short and I’m getting a little long

here. But I guess what I mainly wanted to do is get across the

point that what we see is a great opportunity that tribes really

have never had before. Self-governance was the first effort. Expanding it, and you know, self-governance was really confined to

whatever we had in the Bureau. It had a lot of limitations. When

you expand it, you really give the opportunity for tribes to become

self-reliant and self-sufficient.

That’s how tribes begin to re-instill and get back the dignity that

we’ve always had. We’ve always had economies before the Federal

Government was here. We still make decisions that we think about

for the future.

I thank you for the opportunity to be here to share some of these

thoughts with you today. Obviously this is a project that I feel I

have a lot of passion for, because we’ve seen how it works and I

can show you the experiences that we’ve had and the growth that

we’ve had and the opportunity that has been created for us. I see

this as a huge opportunity for other tribes.

If there’s anything that we can do in terms of our experience to

lend to this effort, I’m perfectly comfortable in committing myself

as well as my staff to any efforts, and the experience that we have.

Thank you.

[Prepared statement of Mr. Makil appears in appendix.]

Senator CAMPBELL. Thank you. That was a very fine testimony.

Between you and Tex, you make me feel good about this bill so far.

[Laughter.]

I wish I could take all the credit for writing it, but as you know,

staff does an awful lot, and have put an awful lot of work and

thought into this bill.

I’ll ask you questions in a few minutes, but I want to tell you,

I think you’re absolutely right when you talk about, if I can paraphrase it, there’s more than one kind of growth when you have the

growth of economic development, because you have the growth of

people’s ability to control their own future. We sometimes hear,

well, you know, we can’t very well set up that program, because we

don’t have the expertise to run it. But it seems to me they can go

hand in hand. People grow at the same rate, maybe, or sometimes

even faster than the business grows. If they’re ever going to learn

how to do it, then there’s got to be some interconnection between

the growth of the business and the growth of the skills to run it,

too.

You have certainly got over one hurdle. I was reminiscing, when

you told me about the terrific inclusion you have in your tribe

when you make decisions, I had a frustrated person one time, I was

visiting a tribe and a fellow came out of a tribal council meeting,
32

he was growling around and I asked him what was wrong, and he

said, my gosh, you get two Indians in this tribe together, you can

have three fights. [Laughter.]

You’ve gotten over that hurdle pretty well with your tribe, I

think, Ivan. It sounds like you have a model that tribes could use.

James, if you’d like to proceed, please.

STATEMENT OF JAMES DELACRUZ, COUNCIL MEMBER,

QUINAULT INDIAN NATION

Mr. DELACRUZ. Good morning, distinguished members of this

committee and Mr. Chairman.

If I could just add a personal note, thank you for your comments.

Joe was my older brother, and we lost him on his way to a selfgovernance conference. I often wonder how he would look upon

things today as they are. Maybe we can hear him rumbling in the

background from time to time and think about what his positions

would be in self-governance. I’ll carry your message to our family

and to the Quinault Indian Nation, and we appreciate that. Thank

you.

My name is James DeLaCruz. I’m a councilman with the

Quinault Indian Nation. I’m honored to provide testimony on S.

343, the Indian Tribal Development Consolidated Funding Act of

2001. I am here today representing the six tribe self-governance

consortium which administers the self-governance communication

and education project. The members of this consortium include six

of the original 10 tribes that participated in the self-governance

demonstration project in 1989, the Mille Lacs Band of Ojibwe Indians, the Jamestown S’Klallam Tribe, the Lummi Indian Nation,

the Hoopa Valley Tribe, the Sac and Fox Nation, and the Quinault

Indian Nation.

Prior to self-governance, we as tribes could not easily function as

the primary service provider on our reservation. That function had

been assumed by Federal bureaucracies. The simple concept that

sovereign tribal control at local level works better than Federal

control hundreds and thousands of miles away is a hallmark of

self-governance. In 1975, Nixon reformed policy of tribal self-determination allowed tribes to contract and reform Federal services.

This was quickly limited with oppressive regulations and Federal

contract oversight.

Self-governance brought about many changes: Contract reform,

the elimination of excessive regulations, the consolidation of funding and programs, the elimination of unnecessary supervision and

the adherence to government-to-government relations. Consistent

with the tribally driven self-governance initiative, tribes must take

the leadership in structuring how the Federal Government carries

out its trust responsibilities to Indian tribes. Economic self-sufficiency remains an unattained goal for most tribes.

S. 343 focuses on one of the aspects of our problems in this

arena, which is how to navigate through the available Federal resources and then to determine how to best utilize these resources.

S. 343 uses the demonstration model of self-governance. S. 343 recognizes and builds on the premise that we are sovereign governing

nations.
33

This legislation allows tribes the opportunity to engage in a demonstration project and negotiate with Federal agencies to determine

how best to make Federal programs a successful effort toward

achieving economic self-sufficiency. This allows for a controlled experiment of inter-departmental cooperation and program consolidation without trying to set all the elements in advance. It allows

tribes and the departments to negotiate. It allows tribes knowledgeable of the needs and resources that it has, to design an Indian

program for economic development, it allows tribes to search

among the menu of the various Federal programs as well as State

programs where the State agrees to cooperate, to put together program elements and funds to support the programs designed by that

tribe.

In addition, it seeks to provide mechanisms of inter-agency administration, regulation, consolidation and one-stop shopping. S.

343 will serve to streamline economic development funds that

tribes can access whether an individual tribe or a consortium. We

recommend that tribes who seek to participate in this demonstration project develop tribal business codes. All too often, tribes enter

into negotiations to allow outside vendors to bring their businesses

to reservations, yet they are unaware of the need to have a tool in

place such as the tribal business code to educate the outside parties

about the Indian culture. All economies that we bring to our land

must reflect our traditions and customs, which are the very nucleus

of our existence.

Just as the reemergence of tribal goverments again operating our

own programs and administering services to our own people has occurred, we can break the cycle of institutional dependency and

begin to seek ways to develop sustainable reservation economies for

our people. To authorize 24 tribes to enter into a demonstration

project, to access economic development funds from all Federal departments is a very positive step and we applaud your efforts.

Legislation such as the Indian Tribal Development Consolidation

Funding Act of 2001 is a very good step. Thank you.

[Prepared statement of Mr. DeLaCruz appears in appendix.]

Senator CAMPBELL. Thank you. I appreciate the testimony of all

three of you. All three of you are well-known tribal leaders in your

own area. And I was reflecting on your testimony, James, in particular. We find ourselves, I guess, in Indian country now at kind

of a cross-roads that some people are having a little problem dealing with. Because traditional Indian people are not materialistic.

That’s what the potlatch and the giveaways are all about, to show

disdain for materialism, to show that they’re not tied to earthly

goods, that they have a higher calling. Yet at the same time, everybody knows you’ve got to have some material things if you’re going

to have better schools for your youngsters or hospitals for your people or nutrition for people that need it. You’ve got to have that.

But it’s been my experience, at least with the vast majority of

tribes that I’ve visited with and know, that the tribal leaders have

found a way to balance one with the other. In fact, I don’t know

very many tribes that would elect somebody to tribal leadership

that has just forgotten the old traditional ways in lieu of just making more money or building more buildings or something of that

nature. Even the big casino tribes, they’ve tried to keep, in my
34

view, have tried to keep a really close interaction between tribal

beliefs and the ability to move ahead in the 21st century in terms

of marketing.

You also reminded me that many times in the past, the Indian

thought at least in some areas was the way we create economic development is that we get a Federal grant, and with that Federal

grant we provide jobs for our people. Somehow that’s called ‘‘economic development.’’ You know as well as I do, coming from very modern dynamic

tribes, that’s not the way it works on the outside. The way it works

is you create a product or you create a service and you market

that, and the profits from that then expand the job base. I think

Indian tribes are really learning that there’s a big difference between just creating jobs from a Federal grant which has to be renewed every couple of years or your economy falls apart, and doing

something where you have created a service or a product.

But I know all three of your tribes have done very well. But also

I know in the process it’s been kind of a step by step thing, you

know, little by little.

Let me ask you first, James, the time when you began, you mentioned something about tribal business plans, tribal business codes,

I guess you called it. Who wrote that for you? Did you use somebody else’s model for that, or did you just try to figure it out yourself, what is the best thing to have in a business code?

Mr. DELACRUZ. The Quinault Tribe does have business codes

and practices.

Senator CAMPBELL. Where did those originate? Did you just do

them yourself or was there a model somewhere that you used from

other tribes, or did the Bureau or somebody else at Federal agencies help you with it?

Mr. DELACRUZ. I don’t really have an answer to that. I know

that we rely on our staff and we go through a committee process,

develop them with a public hearing process.

Senator CAMPBELL. Maybe I could ask all three of you. There

have been obstacles over a period of time, as this growth has gone

and tribes are recognizing more and more that they can expand

self-governance. Maybe you can answer this, Tex. What were the

biggest obstacles you faced when you first started talking about expanding self-governance programs? Did you get those from the Federal Government? Was that where the biggest obstacles were, what

they call ‘‘white-tape’’ sometimes? [Laughter.]

Mr. HALL. So noted. I think your point is right on. I think it is

the bureaucracy that hinders the development. In some instances,

there’s no regulations of time lines. It can take so long to get a

business lease done. And we don’t have the staffing or perhaps the

expertise in some areas of leasing, for example. And there’s no real

time line that’s business friendly.

Obviously we can’t sit for 1 year or 2 years or 3 years or 4 years

waiting for approval of a business lease. Economic development is

just not going to happen.

But in response to your point, Senator Campbell, I think we

should look at a recommendation for a provision to, as President

Makil and Mr. DeLaCruz were talking about their tribes, some sort

of a tribal peer learning process. This is a demonstration project.
35

And after 1 year or 2 years, there will be hopefully some successful

tribes. There should be a provision that they have to help, maybe

not have to, but they should be strongly encouraged to assist other

tribes. Because really, tribes that need it most are really going to

benefit from this.

But I’m just really cautious and concerned that sometimes those

tribes that are successful are the ones that will be there. And those

tribes that need it the most maybe are not going to qualify. And

maybe after the demonstration project, those tribes that President

Makil just showed a big slide on, on the development and leasing

and how he streamlined his process, if he was able to assist other

tribes that are waiting to become a demonstration project tribe, I

think that provision in here would really add to the legislation. I

think it’s really important.

Senator CAMPBELL. If tribes themselves don’t, I wonder if we

couldn’t do that at the Federal level, take things that have made

them successful and put something in place where we have a mentoring process, through legislation or through the agencies, where

they can provide a road map of what was successful, what’s needed

to become a successful tribe. I know they’re not all different, and

I was thinking, Ivan’s tribe is near a very large, metropolitan area,

yours is much farther out, a little difficult to get to, the work force,

transportation of goods, all that kind of thing is a little more difficult. I don’t think we should transfer any wealth yet from Ivan’s

tribe. [Laughter.]

But I know that there are different circumstances. But there’s

got to be some kind of a vehicle where some can learn from the experiences of others.

Mr. HALL. I think it will be a cost savings, Mr. Chairman. Because we know there’s certain instances where a tribe that maybe

doesn’t have the administrative capability will not be successful if

that technical assistance or the tribal peer learning process is not

provided. This would save money in the long run, I think, if we

could add some provision of this type.

Senator CAMPBELL. No question about it.

Ivan, does your tribe get water from the Central Arizona project

which was completed a few years ago?

Mr. MAKIL. Yes, it does.

Senator CAMPBELL. Is that factored into your economic development at Salt River?

Mr. MAKIL. It sure is, and I’m glad you mentioned that. Because

sort of relating to all this is, tribes naturally, because culturally

that’s how we think, look at the scope of things as the total picture.

And water is just as critical as being able to get a loan to build

a building or to do business. That’s where Federal agencies, Federal agencies don’t have the scope of vision that tribes do. Federal

agencies have a tendency to deal with their issue. So they have

blinders on because they’re so focused on their issue.

The blinders focus only on that one issue. Well, what the tribes

have to do is we have to look at all of these different agencies and

see what we can get the best and get the help. And it’s difficult if

you have duplication with agencies because they aren’t talking to

each other. What’s really important and what has been helpful to

our success is that when you start to get these Federal agencies,
36

or when we can manage these things ourselves, and give ourselves

the flexibility and enough time, and that’s what this project needs

to be able to do, it needs to have flexibility.

You also need to be able to give time to have successes. You also

can’t do it without—I think what you need to have is almost a

multi-year kind of thing. Because you’re not going to do it in 1

year, in one project. You need to be able to show results.

And I think you also need to have some sort of priority funding.

That priority funding.

Senator CAMPBELL. This bill is a 3-year demonstration project.

Do you think that ought to be lengthened, or does three give us

enough time?

Mr. MAKIL. I think it gives you a good start. It’s going to depend

on where a tribe is in terms of—see, the tribes look at how they

create a program for the entire community. One of the things we’ve

been able to do, and I think that a lot of tribes are doing now,

there’s an understanding that whatever development they do,

whether it’s in New Town, ND or in Salt River, is that there’s—

we look at it this way. When we do a development, whether it’s for

business purposes or it’s for agricultural purposes or it’s for residential purposes, we know that there’s a physical impact in the

community.

Usually the reason that we’re changing something is because of

an economic impact. So we have a physical impact, we have an economic impact. With that economic impact comes a social impact.

Because now, socially what you have is, you have more jobs, you

have revenue, you’re starting to create that economy. So there’s a

social impact. So now you have a physical, you have an economic

and you have a social impact.

What Federal agencies don’t understand, but what tribes do understand very well, is that there’s a fourth component. That’s a

spiritual impact. We have to be able to live with whatever we create, whether it’s business development or residential development.

Or it’s the use of water. We need to make sure that how we use

water for the next at least seven generations is figured into this

equation. So tribes think of things in that way.

When you get all of these agencies together and you create the

opportunity for tribes to actually create a plan for the growth and

the development and the future of that community, dealing with

the physical impacts, the economic impacts, the social impacts and

the spiritual impacts, you obviously want all those impacts to be

positive impacts, not negative impacts. The way you do that is

when you have control of those resources and you can manage

them to meet your specific situation.

Senator CAMPBELL. Thank you. Maybe one last question, Ivan.

You mentioned your tribe just developed a shopping center, did I

hear that in your testimony? Was the financing done through private banks?

Mr. MAKIL. Yes.

Senator CAMPBELL. Did you have any problem getting the capital

you needed to develop that?

Mr. MAKIL. Yes. [Laughter.]

Senator CAMPBELL. What were the main roadblocks to getting

the money?
37

Mr. MAKIL. Well, roadblocks were many. Obviously it’s the perception that——

Senator CAMPBELL. Worried about unstable government and all

that we’ve heard over and over?

Mr. MAKIL. Exactly, stability in government.

Senator CAMPBELL. How long did it take you to finally get

through the process and get the money?

Mr. MAKIL. I think the process was at least 6 years in the making. We opened that shopping center in 1988. But that process was

started like in the early 1980’s.

Senator CAMPBELL. And it has been successful, with the growth

of that town, Scottsdale, growing all around you. Have you found

at all that the success you had with that shopping center has made

it easier for you when you want to borrow money for other things,

other developments?

Mr. MAKIL. Yes; it has established a track record, and the one

thing that we also did was, we had Federal legislation that dealt

with arbitration issues. Those kinds of things were really important to bankers, so there was an assurance they could collect their

money if there was a default. Those kinds of things that tribes

have to get through.

We have established a track record. We just did a renovation of

our cement plant that was about a $118-million renovation. General Electric Credit Corporation was the company that funded that

loan. When we talked with General Electric Credit Corporation,

what we found was that this was the first loan they had ever made

to an Indian tribe on an Indian reservation. Now that they found

out it could be done, there was an interest in seeing what other

projects they could begin to do.

But it takes that kind of experience in Indian country with businesses, with finance companies, before we have any credibility with

them.

Senator CAMPBELL. Well, this bill is the demonstration project

bill, and as I mentioned a little while ago, it’s in two parts. We’re

going to try to get this thing through and if it works good, we’ll

try to expand it and make it permanent. We’ve had some experience in the past where we tried to help tribes with demonstration

projects that did work good, but we couldn’t get an extended bill

through, or we haven’t yet.

I’m thinking in terms of the bill we passed a few years ago that

allowed tribes to self-insure, so that if there was some kind of a

default, you mentioned that, Ivan, if there was a default, the investors wouldn’t lose their money. I thought it worked great, and all

we heard was that it was working good for the tribes that were in

that demonstration project. But we haven’t been able to get a permanent bill through yet to expand that. So hopefully we will.

Well, thank you very much for your testimony. Any additional

comments, please send them in or call them in.

We will now hear from Katherine Spilde, Senior Research Associate with the Harvard Project on American Indian Economic Development at Cambridge, MA. Katherine, please proceed. Your complete written testimony will be included in the record.
38

STATEMENT OF KATHERINE A. SPILDE, SENIOR RESEARCH

ASSOCIATE, HARVARD PROJECT ON AMERICAN INDIAN ECONOMIC DEVELOPMENT, KENNEDY SCHOOL OF GOVERNMENT

Ms. SPILDE. Thank you. Good morning. Thank you for the opportunity to appear here today. I’m Katherine Spilde, and I’m a Senior

Research Associate at the Harvard Project for American Indian

Economic Development, which is housed in the Kennedy School of

Government at Harvard.

The primary research objective of the Harvard Project is to understand the conditions under which sustained and self-determined

social and economic development is achieved among American Indian nations. I’m here today to speak in support of the Indian Tribal Development Consolidated Funding Act of 2001. Basically I’m

going to be testifying from my position as a researcher for the Harvard Project, which has produced numerous research studies regarding institutional and economic development in Indian country.

My testimony today relies upon the research we have done at the

Harvard Project, specifically applied here to analyze and recommend ways to facilitate the successful implementation of the

goals and purposes of this important legislation. Just by way of

background, I know that other folks from the Harvard Project have

testified before the committee before, but to reiterate, the research

evidence is clear on the overall direction of productive Federal-tribal relations. That is that self-determination is the only Federal policy in a century that has created conditions where American Indian

tribal governments have been able to begin to reverse the legacy

of poverty and economic suppression to which they have historically been subjected.

For many Indian nations, and of course not all, economic development activities are now flourishing, often for the first time in a

century. Most importantly, improvement in economic conditions in

Indian country has been accompanied by improved social conditions. So consistent, then, with self-determination policies and the

government-to-government relationship between Federal agencies

and tribal governments, this legislation appropriately encourages

and promotes coordination between Federal agencies and American

Indian communities. S. 343 builds upon the principles of the Indian

Employment Training and Related Services Act, also known as the

477 Program, which of course is considered one of the most successful economic development programs administered by the Bureau of

Indian Affairs.

As with the 477 program, S. 343 encourages the integration of

funding across the Federal agencies for the benefit of tribal governments. The research at the Harvard Project supports the

partnering of Federal agencies and tribal government with the purpose of a coordinated tribal economic development strategy. It

would allow tribal governments to determine what their economic

development priorities are and then how best to meet those needs.

Again, this is consistent with the findings at the Harvard

Project, and also with the success of tribal self-governance, which

illustrates that when tribes themselves have the opportunity for

self-rule, there are much better chances for economic stability and

then the accompanying social health.
39

Successful implementation of S. 343 has great potential. However, as the GAO report recently noted, tribes do face certain practical hurdles with regard to access to the benefits of some Federal

funding programs. For example, the GAO report and some of the

Harvard Project’s own research found that many tribes often do not

have the human capital needed to handle the administrative and

paperwork requirements of Federal economic development programs. Consequently, they may either avoid using the program

where the requirements seem onerous, or they may spend a large

amount of the Federal funds that they do have fulfilling those requirement and leaving less for the actual implementation of the

program.

So I have listed a few things to consider in terms of the successful implementation of S. 343, both reflecting on Harvard research

and on the GAO report. A couple of these have already been mentioned, both by the Assistant Secretary and some of the tribal leaders. But I am basically interested in looking at the structure for

Federal agencies having incentives and clear mandates with regard

to implementing this legislation.

Also looking at the selection criteria in terms of having tribes

demonstrate fiscal responsibility, which we would argue at least

from the perspective of Harvard research, overlooks the research

evidence about institutional capacity of tribes as a primary indicator of long term economic development stability.

So in conclusion, successful implementation of S. 343 has great

potential to strengthen tribal self-determination and reintroduce

viable and sustainable economies in certain tribal communities. S.

343 would maximize tribal participation in Federal programs to

foster community economic and business development for Indian

communities.

Certainly I think Harvard Project research strongly supports the

concepts contained in S. 343, so thank you, Mr. Chairman, for the

opportunity to provide testimony. Certainly I summarized my remarks, and if you have questions, I will be happy to answer them.

[Prepared statement of Ms. Spilde appears in appendix.]

Senator CAMPBELL. Thank you.

Well, I haven’t read that GAO report, frankly. Paul has, I

haven’t. But I think in some cases it sells the tribes short a little

bit, because it’s based on documentation that’s kind of clinical and

found here in Washington. I don’t know if they really took into consideration the huge success stories we’ve had in some places where

the training went along with the development.

I’m thinking in terms of a lot of casinos who did not have any

management experience in managing a casino. But they got an investor and when they signed the agreements, many of the tribes,

what they did, they also signed an agreement for training their

own people. The first people that came in to manage the casinos

were not Indian. They were from Reno or Las Vegas or wherever

the money came from. They hired expertise.

But written into the agreement was that within 3 years or 4

years or so on, a certain number of the management people would

be tribal members. So it’s a bootstrap thing and a step by step

thing. Many of those casinos now are totally managed by tribal

members, as you probably know. So I’m still skeptical sometimes
40

when anyone says ‘‘Indians don’t have the skills to be able to do

this.’’ Because you’ve got to start somewhere, holy smoke.

I guess certainly there have been some mistakes made in the

past, and I’ve seen some of the derelict buildings out on Indian reservations that were built by outside investors and it didn’t work

out and they lost a building. But those war stories or horror stories, I guess I should use a better word, are a lot fewer, in my way

of thinking, than the success stories.

Let me ask a couple of things. In all the experience you’ve had

with the Harvard group, have you found that there is a correlation

between commitments to government sovereignty, transparency, individual rights, strong tribal leadership and so on, and the economic development that benefits all the tribal members?

Ms. SPILDE. Absolutely.

Senator CAMPBELL. That sounds like a loaded question, because

I would assume there ought to be. But you firmly believe that?

Ms. SPILDE. I know that the two founders and directors of the

Harvard Project, Joe Kalt and Steve Cornell, have been doing research on that particular question, the relationship between governmental institutions and economic development. They’ve been investigating that for about 15 years. Their research consistently

finds that there is a direct relationship between such attributes as

separation of powers, checks and balances, the independence of dispute resolution mechanisms, and other capable self-governance institutions with economic development. There is a clear and direct

relationship.

Senator CAMPBELL. Do you have any research that would show

the difference between how we have done it in the past with 12 individual agencies spending money independent of each other and

somewhat disjointed and not much communication between them

and any research that says if we do have something in place like

S. 343, that there is a better use of money or a more efficient use

of it, or better opportunities for the tribes and a less disjointed approach?

Ms. SPILDE. I think the general findings of the Harvard project

indicate that coordinated efforts, and streamlined funding services

produce less of a burden on tribes, both fiscally and administratively. Certainly the research would support that.

I don’t know of any specific research that has asked that particular question, but I can definitely look into it. I haven’t personally

conducted any.

Senator CAMPBELL. I would appreciate it if you would, to notify

the committee. It hasn’t been done very long, so I guess there’s not

very much information available.

Also, do you know, in your own mind, about any particular incentives that we can offer Federal agencies to work with the tribal

governments to implement this particular demonstration project?

How do you suggest that we put this in place? If we put this in

place in the law, how should the Federal agencies proceed to bridge

that communication gap and that distrust gap and all the other

things we’ve had in the past, the fear of decreased trust responsibility and so on?

Ms. SPILDE. I know the Assistant Secretary spoke to this issue

as well, in terms of a memorandum of agreement, where the De-
41

partment of the Interior would take the lead. I certainly would support that. I know in terms of, from a research perspective, there’s

a saying, measure it and you’ll get it. In other words, having Federal agencies be accountable or report back in terms of what their

efforts have been rather than—simply having a program which

often isn’t enough.

Agencies would have to report back on how they are promoting,

cooperating, educating tribes. As NCIA president, Tex Hall pointed

out, cataloging and making available to tribes the available programs. As I said, measure it and you’ll get it. If you have some sort

of reporting mechanisms for the agencies, that might also be an incentive.

Senator CAMPBELL. Thank you. The last isn’t a question, but a

request. If you would help work with our staff on any recommendations in the weeks ahead as we try to refine this bill a little bit,

if you could help us with that. Frankly, I guess I’ve sat through 20

committee hearings or more that the Harvard Group has been involved in, the Harvard Project. I’ve frankly never heard any testimony yet that I really disagreed with or didn’t find very enlightening or educational or supportive. So if you could help us with this,

I’d certainly appreciate it.

Ms. SPILDE. I’d be happy to. Thank you.

Senator CAMPBELL. And with that, we’ll keep the record open for

2 weeks for any additional comments. And thank all the witnesses

for being here today. This committee is adjourned.

[Whereupon, at 11:15 a.m, the committee was adjourned, to reconvene at the call of the Chair.]

(43)

APPENDIX

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

PREPARED STATEMENT OF HON. FRANK H. MURKOWSKI, U.S. SENATOR FROM ALASKA

I would like to thank the Chairman and Vice Chairman for their tireless effort

to promote the general welfare of this country’s indigenous people. I look forward

to reviewing the testimony from this hearing, and I want to thank them for participating today.

As each of us here knows, we need to find ways that we can cut Government redtape, improve coordination and eliminate wasteful duplication of the many programs

that are designed to help Indians and Alaska Natives. We have a duty to serve our

native people, but we also have a duty to protect the interests of all taxpayers.

Wasted money serves no one.

Many Alaska Native entities are so small they simply lack the administrative personnel needed to complete and manage all of the complex regulations, the web of

paperwork and other requirements in order to participate in many Federal programs. Even those native organizations that do have the administrative capacity

needed to participate shouldn’t have to waste valuable time and resources on needless bureaucracy.

It seems to me that a proposal such as. this could actually save money by allowing

agencies to delegate management authority to other agencies better equipped to

manage certain programs. I hope this is the case. I welcome further consideration

of the bill, and I remain committed to making government more responsible and efficient.

Again, I would like to commend Chairman Inouye and Vice Chairman Campbell

for your leadership and attention to these important issues. I certainly hope the intent of this legislation can be realized, and that we can streamline and simplify the

process of assisting Alaska Natives and American Indians.

PREPARED STATEMENT OF NEAL A. MCCALEB ASSISTANT SECRETARY—INDIAN

AFFAIRS DEPARTMENT OF THE INTERIOR

Good Morning, Mr. Chairman and members of the committee. Thank you for the

opportunity to appear before you today to present the views of the Department regarding S. 343, a bill to establish a demonstration project to authorize the integration and coordination of Federal funding dedicated to community, business and economic development of Native American communities.

The Administration supports the goals of S. 343 to integrate and coordinate Federal funding dedicated to promoting economic development for Indian communities.

The Administration, however, is still reviewing the legislation and has already identified a number of significant concerns with the bill, which we look forward to working with the committee to address.

The Bureau of Indian Affairs is working with the Bureau of Indian Affairs’ Tribal

Budget Advisory Committee’s Subcommittee on Economic Development to develop

strategies to improve reservation economies. These strategies include actions the
44

BIA and Federal agencies can take to be more effective in encouraging economic development for American Indian tribes. Integrating Federal economic development

programs is one the Tribal Advisory Committee’s priorities.

S. 343 is intended to encourage more efficient use of Federal funds in the area

of economic development. Once a tribe submits a plan which is approved by the Department, it is able to pool Federal funds they receive for economic and community

development. These funds are disbursed to the tribe from one office and they submit

one annual audit and report to the same office regarding its expenditures. This allows the tribe to be more flexible in its use of the funds, and more efficient because

it reduces the amount paperwork, without reducing accountability.

S. 343 is based on an existing program authorized under Public Law 102–477, and

which has enjoyed tremendous success. Public Law 102–477 allows tribes to consolidate and integrate employment education and training programs. The program indicates that 89 percent of Indian participants in the program have reached their education and employment goals.

Based on our experiences with Public Law 102–477, the integration of Federal

programs initiative, we offer the following comments regarding S. 343:

No. 1. Part of the success of our current program hinges on our ability to act as

the lead agency. The administrative burden, and costs, are increased if tribes must

go to every Federal agency independently. The process should be streamlined, allowing all tribal grant applications to be funneled through one agency. However, the

bill must be revised to ensure that individual programs will be included in demonstrations only with the concurrence of the head of the Federal agency responsible

for administration of those programs. The bill should be structured so as to allow

the Secretary to enter into a memorandum of agreement with any other agency that

provides assistance to tribes, as defined by the bill, as to which programs will be

included in the demonstration project. Both the Secretary and the involved agencies

should be required to consult with tribes prior to finalizing any MOA. Tribes would

then come to Interior and request inclusion of any of those programs in their overall

consolidated grant. This would lead to more effective coordination and would reduce

burdens on and confusion for tribes. Section 4 of the bill should clarify that tribes

seek approval/disapproval, and implementation and related tasks, through the Department, rather than requiring tribes to work with each agency separately.

No. 2. We recommend that any project evaluations be coordinated rather than

each Federal agency conducting separate reviews. Tribes are often overwhelmed by

numerous duplicative review and analysis of project operations. One coordinated

consolidated review will reduce burdens on the tribes.

No. 3. We recommend that competitive economic development grant programs be

implemented similar to formula funded grants for this project once an award has

been made under this grant.

No. 4. It has been our experience that consultation by an agency before implementation of the Public Law 102–477 program has minimized problems in implementation of the program. Accordingly, we believe it is important that all agencies conduct

consultation prior to taking final agency action in regard to the provisions of this

act.

No. 5. The Administration is also concerned that the scope of the waiver provisions in section 6(c) of the bill is overly broad, and could have adverse consequences

on the environment, civil rights, and other areas of important Federal policy. The

provision provides for the waiver of any Federal statutory provisions, regulations,

policies, or procedures that the applicant believes need to be waived in order to implement the project. A number of Departments and agencies within the Administration have raised serious concerns with the breadth of this section and its mandatory

requirements.

The Administration looks forward to working with the Committee on this important legislation. We also note that other Departments and agencies are still reviewing this legislation and may submit views to the Committee. For example, the Department of Justice has raised a constitutional concern with section 15 of the bill;

the Department of Treasury would like section 11(a) to make clear that funds remain in the General Treasury until they are disbursed to Tribal Organizations; and

the Office of Management and Budget is concerned section 6 may conflict with Public Law 106–107, the Federal Financial Assistance Management Improvement Act

of 1999.

This concludes my prepared testimony. I would be happy to answer any questions

the committee may have.
45

PREPARED STATEMENT OF TEX G. HALL, PRESIDENT, NATIONAL CONGRESS OF

AMERICAN INDIANS

Chairman Inouye, Vice Chairman Campbell, and other members of the committee,

I would like to thank you for inviting me here to testify on this important and significant piece of legislation, the Indian Tribal Development Consolidated Funding

Act. As you know, the National Congress of American Indians—the oldest, largest,

and most representative Native American group in the Nation—is focused on economic development and helping tribes get the tools necessary to exercise their sovereignty. We believe that this bill is a step in the right direction to help tribes along

the way to building successful economies and healthy communities.

The aim of this bill is to give the tribes the ability to coalesce the programs from

the various agencies they use to pursue development. In doing this, tribes increase

the value of the assistance they receive because they are able to pool together resources that would otherwise make a smaller contribution to the tribes’ initiatives.

For instance, if a tribe were trying to put together a housing project, it would often

apply for many different grants and technical assistance programs to help further

the project. However, each grant and Government program used has its own set of

application, implementation,and reporting requirements. These requirements, even

though they all go to the same project, must be fulfilled separately. This often creates an undue hardship on those project managers who would be able to use the

time they take to fulfill Government requirements more effectively in implementing

the goals of the project. The Indian Tribal Development Consolidated Funding Act

would assist tribes in cutting administrative tasks and costs, putting them more directly about the job of building sustainable tribal economies.

This bill also focuses on one of the problems that tribes find when they attempt

to move forward with their programs: The lack of cooperation between Federal agencies. Earlier this week there was a man in our offices meeting with some agency

folks about wind energy. He said that coming to Washington was the hardest part

of his job. When I asked him why, he replied that he has to make the 3,000-mile

trip twice a year to, ‘‘introduce people who work across the street from each other.’’

Unfortunately, this is too often the case, even out in Indian country. When tribes

try to move forward with a project that will help their people, we waste a lot of time

with duplicative Federal requirements, and the agencies are often unwilling to cooperate with each other because they need all their regulations fulfilled, independent of the other agencies and independent of the best interests of the tribes. There

are so many hoops to jump through in Indian country; we’re running out of hoop

dancers to hire for our project managers.

This bill aims to remedy some of these problems. According to the legislation, instead of reporting to each agency separately, the tribe would be able to identify the

programs and assistance that they planned to use, propose waivers of regulations

and other requirement so that a unified application and report would fulfill the

agencies I needs,and single out one agency to administer the tribe-specific program.

This not only alleviates the reporting requirements on the tribe, but streamlines the

process for the Federal representatives as well.

In addition to lessening the burden on the agencies and the tribes, this legislation

should increase the use of Federal programs that go largely unused. According the

GAO report on Indian Economic Development programs, only about one-half of the

survey participants used any of the 100 assistance programs. Some of the reasons

that these programs lay fallow are because of the administrative costs to the tribe

associated with the preparation and execution of the project and its application and

low levels of funding. This bill will mitigate some of those circumstances by allowing

the tribes to merge efforts to comply with multiple programs. Moreover—and this

is an important incentive for our brothers and sisters in the government—this bill

presents the agencies with an opportunity to comply with standing executive orders

and agency plans that call for interagency cooperation with regard to Indian Economic Development. This bill is truly an example that this program will make the

whole of the Federal assistance tribes receive greater than the sum of its parts.

We are happy to see this bill, as it is a familiar concept to many of us in Indian

country. This bill looks like an expansion of a consolidated funding program that

came from this committee in the 102d Congress and that is very popular in Indian

country: The 477 process. Though the 477 process is limited to four Federal agencies

and programs related to employment and training, it has proven to be a good way

for tribes to streamline the application and reporting processes involved in Federal

programs. The basic premise and process of S. 343 is working currently, and we

hope that this process can expand efficiently and easily into the rest of the Government agencies.
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However, this is a hope tinged with some caution. We feel that this committee,

in this legislation must make it very clear that the agencies are to be willing to

waive certain provisions when those are in the best interests of the tribe and covered elsewhere in the program functions. We know that it is not the intent of this

committee to subject the tribes to interagency bickering or territorialism, which we

fear may happen. As I said earlier, there is not a lot of cooperation between the

agencies. Though provisions in subsection (c)(6) lay out the process in general, we

don’t want to see projects stalled when agencies refuse to waive provisions or requirements. Agencies function according to their interpretation of Congressional intent, and we urge you to make your intent clear that agencies are to waive provisions that tribes identify through the application or consultation process, excepting

the limitations you have described. We think that this clarification and emphasis

will make the process easier as applications move forward.

We understand that this bill creates a demonstration project, and thus is not designed for a large-scale implementation. We think that the bill is good, and will be

significantly useful to the tribes who already have some manner of expertise in government program administration and have the adequate infrastructure and resources to perform the accounting, audit, and application processes. However, many

tribes do not yet have these resources. As the program moves forward, NCAI would

like to see provisions that would provide some assistance for those tribes, especially

in the form of peer learning processes. Our experience shows us that tribes learn

best from other tribes who have already gone through the processes. When we are

able to visit other tribes, who were often facing the same situations we are, and see

what and how they have accomplished specific tasks, it helps us put a perspective

on how our tribes should move forward. We think that after the first year or two

of the project, those tribes who have participated will have the expertise to assist

other tribes in the program. This peer-learning process requires nominal funding,

and the outcomes of empowering tribes as examples, as well as the monies saved

by this program in administration and related costs will be more than enough to

offset the costs.

In addition to adding a peer-learning provision, we ask that this committee also

consider adding the following language as an additional section in the bill that

would preserve funding levels: ‘‘In no case shall the amount of Federal funds available to a tribal government involved in any demonstration project be reduced as a

result of the enactment of this act.’’ Such a provision would ensure that the various

program funds are not lowered any further.

We would like to single out section 14 for praise, as we feel that this provisionif implemented with the enthusiasm of the Federal agencies, states, and tribes-will

bring this cooperative model out of its current disuse and install it as a keystone

of new success. We have been working with the National Governors Association on

building state-tribal relations for the past several years, and we believe that this

will allow the states to invest in the wellness of tribal economies, which will in turn

strengthen state economies, and will build state-tribal relationships.

Overall, we support the passage of the bill, and we are available to work with

the committee to insert and implement these suggestions and the legislation in

whole. We commend the committee for its commitment to Indian country, and appreciate its focus of helpful legislation that, coupled with the exercise of our sovereign rights, will allow our tribes to best serve their people for generations to come.

Thank you for your invitation to testify, and I welcome any questions you may have.

PREPARED STATEMENT OF IVAN MAKIL, PRESIDENT, SALT RIVER PIMA-MARICOPA

INDIAN COMMUNITY

Chairman Inouye, Vice Chairman Campbell, members of the committee, fellow

tribal leaders, and distinguished guests, I am Ivan Makil, president of the Salt

River Pima-Maricopa Indian Community near Phoenix, AZ. Our community of some

7,800 members, predates Arizona as a State. Yet, in the last 50 years, urban growth

has come to us.

Today, we are surrounded by metropolitan Phoenix and border Tempe, Scottsdale,

Mesa, and Fountain hills. A contemporary but still traditional Indian community,

the Salt River Pima-Maricopa Indian Community is concerned about our physical,

social, economic, and spiritual development. Like other tribal communities in this

country, we are very aware that future generations of our people will live with the

results of the decisions we make today. It is critical, therefore, that we make the

very best decisions that we can.

We are fortunate, because, as we plan for the world that the next Seven Generations will inherit, our community enjoys an important advantage. That advantage
47

enables us to make better decisions. We are one of 260 tribes in this country that

has self-governance.

Our road to self-governance began at the same time that President Richard Nixon

launched self-determination in 1970. That action, as you know, led to the Indian

Self Determination & Education Act of 1975. We entered our first contract in 1970

for our Police Department. This act set us on track for self-determination and selfgovernance. Since that initial contract, we have grown to be an active self-governing

tribe.

Today, we have more than three decades experience with this system. I would like

to take a few moments to talk to you about our experience and why we believe that

the principles contained in S. 343, which authorizes a demonstration project for expanded self-governance, is such a necessary and positive step for tribes. As introduced by Senator Campbell, it establishes a demonstration project that authorizes

the integration and coordination of Federal funding dedicated to the community,

business, and economic development of Native American communities.

It is significant that this approach is both systematic and holistic. Systematic is

critical for functionality and efficiency. Holistic, however, is equally important, as

our culture teaches us to view the world as an integrated place. This bill is systematic as it will create a block grant fund from revenues available in 15 different Federal agencies, agencies that do not have as their normal priority dealing with Native

American tribes. It is holistic in that by combining diverse Federal agency dollars,

it encourages tribes to take the wider, rather than narrow, view.

Realistically, it would allow tribes to pool available Federal funds to meet the

needs of their people in more effective ways. It would also put new resources into

the hands of tribal leaders who can pool these dollars and use them more effectively

to create opportunities and solve problems for their people.

Over the past 30 years, the Salt River Pima-Maricopa Indian has done just that.

In the 1980’s, we were the first tribe to develop a major shopping center on our

land in Arizona. To accomplish this, we put together more than 300 different landowners with a developer and created the Pavilions Shopping Center. We could not

have done this without the opportunities available under the Indian Self-Determination and Educational Assistance Act. Wherever we have had an ability to integrate

the process, we have done so and improved the process. Integration has enabled us

to create more positive results.

For example, the image you see compares our unique lease process to full-service

tribes. The yellow highlighted areas show the steps that Salt River takes when securing leases such as for the Pavilions.

Compare this process to the steps, marked in green that a non-self-governance

tribe must go through. Even a quick glance shows that Salt River has taken over

the functions in land development process previously handled by the Bureau of Indian Affairs. Moreover, we do this process more efficiently and effectively and in

economic development, time is money.

As we have taken over management of our own resources, we established a realty

data base and a compatible geographic information system. As a result, we can

track ownership for every fractionated piece of land owned by heirs.

We can also show them exactly where their land is. And most importantly, we

can—and do—issue lease payment checks to our members.

Now, more than a decade after developing the Pavilions Shopping Center, the

community council has embarked upon a sophisticated strategic planning process to

help us determine our future. As part of this lengthy process, we are gathering information that is enabling us to identify our critical areas of interest. As the decisionmakers and managers for our community, our commitment to strategic planning

is helping us design our future.

To make sure that this future is healthy—physically, socially, economically and

spiritually—we are setting priorities today that will guide our tomorrow. Because

these priorities are consistent with our overall goal, we can be assured that everyone—the community as a whole and each individual member—will be best-served.

From our experience, I have no doubt that each Federal program was an excellent

idea when it was created. Problems began as each developed with its own set of

blinders. Because each program grew as its own entity—without any way to leverage other like-minded programs or even an acknowledgment of duplication—Federal

programs designed to help Indian people have often created new problems for us.

The Salt River Pima-Maricopa Indian Community has created its own destiny. We

saw opportunities and made things happen for ourselves. Over the years, our community has developed sophisticated expertise. But, not all tribes have this kind of

knowledge close at hand.

I urge you, as you design this demonstration program, to incorporate flexibility

and time enough so this project can prove itself. Recognize that because not all
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tribes have local expertise, some will need to look outside their own membership for

technical support and staffing. Given enough time and an assurance of flexibility,

our tribes can grow their own economies and nurture the kinds of expertise they

need to succeed.

I urge you to fully support S. 343, which requires 15 Federal agencies to take an

historic step to work together with tribes that wish to be part of this demonstration

project. It is critical, however, that any tribe that joins this project be required to

demonstrate how they are planning to use these revenues. Tribes must create a

plan that serves their entire community.

I know this bill may need to be amended to address certain concerns as it goes

through the process. My staff stands ready to assist the Committee in making this

the best possible legislation for Indian country.

The Federal Government needs the ability to have a systemic and holistic approach to deal with tribes. Tribes need you as a partner. If you are going to take

on this effort, I urge you to do it right. Make the demonstration real and make it

multi-year so all of us have time enough to achieve results. I also urge you to established priority funding for this effort so that it has every chance for success.

Both the integration of the 15 agencies and the holistic planning exercise are essential; the process cannot work unless both are in place. By supporting this systematic and holistic approach to planning and funding, S. 343 can become a valuable tool to help tribes design and develop their own destiny. I urge you to commit

to this thoughtful and far-reaching bill.

Mr. Chairman, thanks again for the opportunity to testify in support of S. 343.

I would be happy to remain here to answer any questions you or the committee

members may have.

PREPARED STATEMENT OF KATHERINE A. SPILDE, PH.D., SENIOR RESEARCH ASSOCIATE, HARVARD PROJECT ON AMERICAN INDIAN ECONOMIC DEVELOPMENT, KENNEDY

SCHOOL OF GOVERNMENT, HARVARD UNIVERSITY

Good morning, Mr. Chairman, Mr. Vice Chairman and members of the committee.

Thank you for the opportunity to appear here today. My name is Katherine Spilde.

I am a Senior Research Associate at the Harvard Project on American Indian Economic Development, in the Kennedy School of Government, Harvard University.

The primary research objective of the Harvard Project is to understand the conditions under which sustained, self-determined social and economic development is

achieved among American Indian nations.

I am here today to speak in support of the Indian Tribal Development Consolidated Funding Act of 2001 (S. 343), introduced by Senator Campbell and cosponsored by Senators Inouye and Johnson. The purpose of S. 343 is to establish a demonstration project that would authorize the integration and coordination of Federal

funding dedicated to the community, business and economic development of American Indian communities. I will be testifying, from my position as a researcher for

the Harvard Project, which has produced numerous research studies regarding institutional and economic development in Indian country. My testimony today relies

upon the work we have done at the Harvard Project, applied here to analyze and

recommend ways to facilitate successful implementation of the goals and purposes

of this legislation.

By way of background, the research evidence is clear on the overall direction of

productive Federal-tribal relations: Self-determination is the only Federal policy in

a century that has created conditions wherein American Indian tribal governments

have been able to begin to reverse the legacy of poverty and economic suppression

to which they have historically been subjected. For many Indian nations, but not

all, economic development activities are flourishing, often for the first time in a century. Most importantly, improvement in economic conditions in Indian country has

been accompanied by improved social conditions. Where we see this progress, it is

invariably the case that tribes are building their own capacities to govern, manage,

and implement economic development strategies that fit their ends and values.

Consistent with self-determination policies and a government-to-government relationship between Federal agencies and tribal governments, this legislation appropriately encourages and promotes coordination between Federal agencies and American Indian communities. S. 343 builds upon the principles of the Indian Employment, Training and Related Services Act, also known as the ‘‘477 program.’’ As you

know, the 477 program is considered one of the most successful economic development programs administered by the Bureau of Indian Affairs, as it authorizes tribal

governments to consolidate job training funding from different agencies into one efficient program that meets the specific needs of the community. As with the 477 pro-
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1 ‘‘Economic Development: Federal Assistance Programs for American Indians and Alaska Natives.’’ General Accounting Office. December, 2001. 2 Ibid. 13.

3 Ibid. 14.

gram, S. 343 encourages the integration of funding across the Federal agencies for

the benefit of tribal governments and their programs.

The research of the Harvard Project supports the partnering between Federal

agencies and tribal government with the purpose of a coordinated tribal economic

development strategy. Consistent with the self-determination policy, S. 343 would

allow tribal governments to determine what their economic development priorities

were and how best to meet these needs. S. 343 is consistent with the findings of

the research undertaken by the Harvard Project, and the successes of tribal selfgovernance illustrates that when tribes themselves have the opportunity for selfrule there are much better chances for economic stability and social health.

Successful implementation of S. 343 has great potential; however tribes face certain practical hurdles that may limit effectiveness of this legislation. Recently, a

GAO report1 was published in December 2001 and it echoed what the Harvard

Project’s research has found with regard to the challenges that face tribes in securing financing, especially from Federal funding sources. The GAO report found that

many tribes do not have the human capital or the expertise needed to handle the

administrative and paperwork requirements of Federal economic development programs. Consequently, tribes may avoid using a program where the program’s requirements seem onerous, or tribes may spend a large amount of the Federal funds

they have on those requirements, leaving less for the actual implementation of the

program.2 In addition to onerous requirements, the GAO reported that many tribes

are discouraged from seeking funds from particular (unnamed) Federal agencies because they have never been successful in the past.3 It is important that tribes are

not set up to fail under S. 343. Tribal capacity to administer a comprehensive economic development strategy as authorized by S. 343 must be present in order for

a tribe to successfully carry out S. 343.

Other recommendations necessary for successful implementation of S. 343 are as

follows:

• Federal agencies need incentives to work with tribal governments.

• Federal agencies need clear mandates with regard to implementing this legislation, as most agencies lack the expertise necessary to work with tribes on interagency projects.

• The legislation should balance devolution of Federal responsibility with a continued commitment to the Federal trust responsibility.

• Currently, the only selection criteria required is demonstration of fiscal responsibility, which overlooks research on capable institutions as a primary indicator

of long term economic development stability.

In conclusion, successful implementation of S. 343 has great potential to strengthen tribal self-determination and re-introduce viable and sustain economies in certain

tribal communities. S. 343 would maximize tribal participation in Federal programs

to foster community, economic and business development for disadvantaged Indian

communities. Our research supports the concepts contained in S. 343, although certain suggestions outlined in my testimony are meant to ensure successful implementation of S. 343. The very purpose of this legislation-to facilitate and maximize

tribes’ access to Federal funding for economic and community development—is integral to the economic viability of disadvantaged Indian communities.

Thank you, Mr. Chairman for the opportunity to provide testimony before the

Committee today. If there are any questions, I will be happy to answer them.
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